|  APR 1988

On-balance volume by Tom Aspray

On-balance volume by Tom Aspray On-balance volume or OBV is one of the early technical tools developed by the well-known market analyst, Joe Granville. With the advent of new, and supposedly more sophisticated technical tools, it is used less often. Many analysts feel it is not useful, but I would disagree. I find it a very useful and simple technical tool. While it is much faster and easier to calculate this indicator by computer, it is very easily calculated by hand for individual stocks, market indices or commodities. Here is how you calculate it by hand: 1) Pick an arbitrary starting volume number. On most commodities or stocks take the volume for one week for daily plotting or a month's volume if you are plotting weekly. 2) For the first OBV point, if the price on the first day is higher than the previous day, add in the volume; if it is lower, subtract the volume. For example:

by Tom Aspray