OBV (On-Balance Volume)

What is OBV (On-Balance Volume)?

On-Balance Volume (OBV) cumulates volume directionally: it adds the period's volume on up days and subtracts on down days. Rising OBV means net buying pressure even if price doesn't yet reflect it. A bullish OBV divergence (OBV trending up while price stays flat or weak) is the classic accumulation signal — institutional buyers absorbing supply patiently before the breakout.

How Traders Use OBV (On-Balance Volume)

• Rising OBV with flat price: accumulation — institutional buying without spiking price.
• OBV new high while price lags: breakout often imminent.
• Bullish OBV divergence: OBV up while price drifts down — strong reversal precursor.
• OBV trend should match price trend: divergence is a warning of underlying weakness or strength.

Where We Use OBV (On-Balance Volume) in Our Penny Stock Scans

• Penny Stocks Under Accumulation

Related Indicators

• MFI (Money Flow Index)
• TTM Squeeze