On-Balance Volume | How to Anticipate Trend Reverse?

Hello, dear subscribers!

Today we have a very useful information about the potential trend reverse anticipation and trend's strength measurement. On-balance volume (OBV) is one of the most powerful indicator for these purposes. The rising OBV means that the bulls control the market, falling OBV means the bearish pressure, OBV on the sideways means the equal strength of the bulls and bears.

Here are 9 combinations of the price action and the OBV which can help you to forecast the future trend.

1.Price Uptrend + OBV Uptrend
It means that the uptrend is strong and confirmed by the volume. There is a high probability of the uptrend continuation.

2.Price Uptrend + OBV Sideways
The uptrend is not so strong as in the previous point, but bears are not so strong to reverse it.

3.Price Uptrend + OBV Downtrend
There is a sign of the potential reverse to the downtrend, be careful.

4.Price Downtrend + OBV Uptrend
There is a sign of the potential price trend reverse from downtrend to uptrend.

5.Price Downtrend + OBV Sideways
Here is the sign of weakness of the uptrend, but the bulls still have not enough power to reverse the trend.

6.Price Downtrend + OBV Downtrend
It means that the downtrend is strong and there is no potential reverse anticipated.

7.Price Sideways + OBV Uptrend
Bulls accumulates the power to reverse the sideways to the uptrend. This is the bullish sign.

8.Price Sideways + OBV Sideways
This is indefinite situation. Trade execution is not recommended.

9.Price Sideways + OBV Downtrend
Here is the sign of the potential downtrend beginning.

DISCLAMER: Information is provided only for educational purposes. Do your own study before taking any actions or decisions.