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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. |
