Article/Author: Omega Research Inc., 1997

Download: OBV.ELA

Category: Indicator > Volume Based

Description:

The On Balance Volume indicator adds to a running total the volume of each bar with a higher close than the bar before and subtracts from the total the volume of each bar with a lower close. The running total is plotted as a line.

Usage:

The use of both price and volume provides a different perspective from price or volume alone. For example, higher prices with light volume will cause On Balance Volume to rise slowly, possibly indicating that the trend lacks conviction. Because On Balance Volume begins accumulating values from the left of the chart, the numeric value of On Balance Volume will depend on the data available in the chart. Therefore, the relative value, or trend direction, of On Balance Volume is more important than its numeric value.

PLOT1(OBV, "OBV");



{ALERT CRITERIA}

IF HIGH > HIGHEST(HIGH, 20)[1] AND OBV < HIGHEST(OBV, 20) THEN

	ALERT("A BEARISH DIVERGENCE HAS BEEN DETECTED")

ELSE

	IF LOW < LOWEST(LOW, 20)[1] AND OBV > LOWEST(OBV, 20) THEN

		ALERT("A BULLISH DIVERGENCE HAS BEEN DETECTED");