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TA Challenge: OBV, forecast market moves & spot reversals
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TA Challenge: Get to know OBV in one chart

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Meta Moo joined discussion · Aug 16, 2022 11:39
Have you ever heard of the rule: volume precedes price?
Typically, before a stock price moves, the volume comes into play. It plays a significant role in buying and selling stocks. Granville believed that volume was the driving force behind markets and designed OBV to predict when major market moves would occur.
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TA Challenge: Get to know OBV in one chart
Case Study
TA Challenge: Get to know OBV in one chart
The above chart shows a bullish divergence forming in July. In terms of price, this stock moved below its June low with a lower low in early July. But OBV held above its June low to form a bullish divergence. OBV went on to break resistance before the stock broke resistance. A week later, this stock broke resistance and continued for a more than 30 percent gain.
Tip: The divergence between OBV and price may alert us that a price reversal could be in the making.
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Disclaimer: This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Tap more.
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