On Balance Volume Moving Average
What is On Balance Volume Moving Average?
The On Balance Volume Moving Average is a technical indicator introduced by Vitali Apirine. It’s a variation to the On balance volume (OBV) indicator. In this modified version, OBV is given a smoothing by exponential moving average.
The volume gains positive pressure when there is a rise in the main line of the On Balance Volume Moving Average. This leads to an increase in price. On the contrary decrease in On balance moving average line indicates a decrease in volume pressure. So this can lead to price reduction.
The main line can also be analyzed in terms of divergences with respect to the main price plot. This signal line helps to identify crossovers.
Chart example of On Balance Moving Average:-
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