GlossaryIntermediate
On-Balance Volume (OBV)
A running cumulative total that adds a period's full volume on an up day and subtracts it on a down day, used to gauge buying/selling pressure.
On-Balance Volume (OBV), developed by Joseph Granville, is a running cumulative total that adds a period's entire trading volume when price closes higher than the prior period, and subtracts the entire volume when price closes lower.
The resulting line is watched less for its absolute level and more for its trend and for divergence from price — OBV rising while price stays flat, for example, is commonly read as a sign of accumulating buying pressure not yet reflected in price. See Kaavon's dedicated OBV article for the full calculation.
Examples
- OBV rising steadily while price moves sideways is commonly read as a sign of quiet accumulation that hasn't yet shown up in price.
- OBV's absolute numeric value isn't meaningful on its own — only its trend and its relationship to price are typically watched.