TA Challenge: Get to know OBV in one chart
Have you ever heard of the rule: volume precedes price?
Typically, before a stock price moves, the volume comes into play. It plays a significant role in buying and selling stocks. Granville believed that volume was the driving force behind markets and designed OBV to predict when major market moves would occur.
Now, let's start the 8th TA Challenge!
Now, let's start the 8th TA Challenge!
Case Study
The above chart shows a bullish divergence forming in July. In terms of price, this stock moved below its June low with a lower low in early July. But OBV held above its June low to form a bullish divergence. OBV went on to break resistance before the stock broke resistance. A week later, this stock broke resistance and continued for a more than 30 percent gain.
Tip: The divergence between OBV and price may alert us that a price reversal could be in the making.
Review the previous TA topics:
1. MA: How do you identify trends with moving averages?
2. BB: Breakout? Reversals? How to use Bollinger Bands?
3. RSI: How does RSI tell whether a stock is overbought or oversold?
4. KDJ: A short-term trading tool you can't miss
5. PSY: Emotional trading is bad? PSY doesn't think so!
6. SAR: How to use the SAR to spot reversal signals?
7. BIAS: A day trading tool for the rebound
1. MA: How do you identify trends with moving averages?
2. BB: Breakout? Reversals? How to use Bollinger Bands?
3. RSI: How does RSI tell whether a stock is overbought or oversold?
4. KDJ: A short-term trading tool you can't miss
5. PSY: Emotional trading is bad? PSY doesn't think so!
6. SAR: How to use the SAR to spot reversal signals?
7. BIAS: A day trading tool for the rebound
Have you added the OBV indicator to your chart?
How do you select stocks?
Does the OBV indicator provide you with a fresh perspective?
Do you think "volume precedes price" improves your trading?
*We will select 8 TOP COMMENTS for this post. Winners will get 200 points after this challenge, with which you can exchange gifts at Reward Club.
Disclaimer: This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Tap more.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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NANA123 : Goooooood
I learned a lot. Thx meta moo
Milk The Cow :
YUyuandeng1978 : It's time to lay it out! Don't be affected by some fluctuations
LH_XY_C_L : OBV creates a new indicator for stock selecting, company's fundamental still the key but OBV let me know when to enter the market. #OBV
72749006 : nice nice
XJ 188 : nice
Dragonministerdixon : I got a lot out of this. I thank you for your feedback.
Bruce teo : let learn together
SimplyStephy : Volume must be the most honest data in stock market trading.
bboxer25 : I have not added OBV yet, but am looking forward to it. I’m going to select stocks that are showing a decline in prices to go for the bullish OBV.
I’ve always tried to find the best tools for day trading, and I can confidently say that OBV will help out a lot.
I don’t know if “volume precedes price” will improve it, cause volume fluctuates all the time, but it gives me a new perspective.
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