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Positive Volume Index
Description
The Positive Volume Index (PVI) relates an increase in volume to the
change in the security's price. When volume increases from the
previous day, the PVI is adjusted by the percentage change in the
security's price.
If (V > ref(V,-1)) then
PVI = I + (((C - ref(C,-1)) / ref(C,-1)))
If (V <= ref(V,-1)) then
PVI = I
Where:
C = Today's closing price
ref(C,-1) = Yesterday's closing price
I = Yesterday's Positive Volume Index
PVI = Today's Positive Volume Index
V = Today's volume
ref(V,-1) = Yesterday's volume
The PVI is constructed so it only displays changes on days when
volume increases from the previous day. Because rising prices are
usually associated with rising volume, the PVI will generally trend
upward.
Interpretation
The interpretation of the PVI is the opposite of the NVI.
The PVI seeks to show what "uninformed" investors are doing.
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