An Apple a day keeps the doctor away!

Traders love signals to buy/sell. Afterall, who doesn't like to make money? While there are many ways to inteprete data, there isn't one definitive way to ensure that your analysis is always correct. As such, it is important to combine analysis results with others to compare results.

The On-balance Volume(OBV) indicator is one way to view historical data to predict future stock prices. It is worth noting that the OBV is a method that measures more of long term sentiments (depending on the interval of your time frame) of the stock rather than short term ones, as you'll see later.

Notice that the white line when drawn, it shows a discrepancy right off the bat. The OBV although showing no noticeable change, the price still steadily increased over the month of July to November. and afterwards, we see the OBV shot up immediately, presumably it due to a huge event. Overall, there's nothing of note as of yet, apart from the gradients of OBV being almost similar to the price chart.

Now looking at the yellow lines, observe that the gradient of the OBV is steeper than the price gradient of the stock. Similarly, the purple and blue lines display the same phenomenon.

Thus far, we have seen that if the gradient of the OBV is not steep, the steeper the stock price rises or falls.

Perhaps a way of utilising the OBV (of good stocks) may be to observe the gradients of it in the long term and attempt to make a deduction.

If it has a small gradient going downwards, it indicates stock prices dropping rapidly, while if the gradient is going upwards, it may indicate rapid growth.

Lastly, a way to countercheck the reasoning of apple's stock growth may also be to observe the short selling historical data.

From here, we see that the historical short selling volume shows that the average short selling dropped from nearly 9-10m to 6-7m. This suggests that the sentiment of Apple definitely went from (possibly) bearish or neutral to bullish with the reduction of short selling volume.

I believe that OBV is a great indicator tool to use. However, it definitely shouldn't be used as an indicator alone as it sometimes is rather confusing to look at, and wrong deductions may sometimes be concluded. Since OBV measures sentiments of a stock, it could be paired with short selling historical data as well to conclude if the stock should be bought or sold for the long run, for durations possibly from a week to a month.

That's all from me! ciao~