How do you read a negative volume index?

Negative Volume Index (NVI) Calculations If current volume is greater than the previous day’s volume, PVI = Previous PVI + {[(Today’s Closing Price-Yesterday’s Closing Price)/Yesterday’s Closing Price] x Previous PVI}. If current volume is lower than the previous day’s volume, PVI is unchanged.

Can a stock volume be negative?

Negative volume balance is a sign of weakness. It shows that the stock falls on high volume and reacts upwards on low volume. This indicates that investors are worried about not being able to sell when something happens, and also hesitant to buy on rising prices. Volume balance is a very important indicator.

How do you read a positive volume index?

Understanding the Positive Volume Index (PVI) The PVI will be more volatile when volume is rising and the NVI will be more volatile when volume is decreasing. Since the primary factor of the PVI is price, traders will see the PVI increasing when volume is high and prices are increasing.

How do you watch volume on a stock?

Where To Find Volume on a Chart. All trading/charting platforms can visually display volume throughout the trading day usually at the bottom of the price chart. Volume is typically displayed as a vertical bar representing the total volume for the specific incremental charting time period.

What does negative volume mean in stocks?

The Negative Volume Index measures volume on the points that the volume is less than the prior point. The interpretation of the Negative Volume Index (NVI) assumes that on days when volume increases, the crowd-following “uninformed” investors are in the market.

What is negative volume trading?

Description. The Negative Volume Index (NVI) is a cumulative indicator, developed by Paul Dysart in the 1930s, that uses the change in volume to decide when the smart money is active. The NVI assumes that smart money will produce moves in price that require less volume than the rest of the investment crowd.

What is positive volume and negative volume?

The interpretation of Positive Volume Index (PVI) assumes that on days when volume increases, the crowd-following “uninformed” investors are in the market. The Negative Volume Index measures volume on the points that the volume is less than the prior point.

What is positive volume index and negative volume index?

The Positive Volume Index (PVI) is often used in conjunction with the Negative Volume Index (NVI) to identify bull and bear markets. The PVI focuses on days when the volume has increased from the previous day. PVI’s premise is that the “uninformed crowd” takes positions on days when volume increases.

How do you read stock volume?

Volume measures the number of shares traded in a stock or contracts traded in futures or options. Volume can indicate market strength, as rising markets on increasing volume are typically viewed as strong and healthy. When prices fall on increasing volume, the trend is gathering strength to the downside.

What is positive and negative volume?