Technical Studies: On Balance Volume

The On Balance Volume (OBV) indicator tells the story of a security's price through the viewpoint of volume.

Essentially, the OBV is a running total of volume for the selected time period. Steep moves in the line reflect strong increases in volume. When the security's price closes lower vs. the previous period (minutes/hours/days/weeks/months, based on the selected frequency), all volume for that period is subtracted from the OBV. A higher close, conversely, adds all volume for that period to the OBV.