How To Judge The Relationship Between Quantity And Price?

Generally speaking, investors' attention to stock price changes is much greater than that of volume changes. Based on the theory of technical analysis, we believe that the analysis of volume and price must be combined to achieve better results. In fact, the judgement of the trend of stocks or stocks can not be divorced from the analysis of volume. Market experience also shows that trading volume usually changes first than stock price. Therefore, in the judgment of stock market trend, it is necessary to grasp the application principle of OBV index to make up for the deficiencies in stock price analysis.

The OBV line, also known as the OBV energy tide, is used to quantify the volume value and make the trend line. In line with the stock price trend, the market atmosphere is deduced from the relationship between price changes and turnover volume. Because in the market, investors' divergence in the future trend of stock prices will be reflected by changes in volume. The greater the divergence, the greater the volume of transactions. The theoretical basis of OBV is that the change of market price must be matched by volume. When the stock price rises, the volume must increase, but it does not necessarily require that the change of volume is directly proportional to the change of stock price. The fluctuation of market price is difficult to continue because of the rise and fall of the price and the turnover volume. It can be seen that the starting point of OBV is based on volume. Price of stock The leading indicators of change, short-term stock price volatility and corporate performance are not completely consistent, but influenced by popularity. Therefore, the change of volume can predict the direction of stock price volatility.

OBV raised the stock price. volume It is regarded as the accumulation of human beings, making the corresponding addition processing, and the volume of the stock falling day is regarded as human dispersion and subtraction. The application principle of OBV index focuses on the change of OBV line shape. In operation, it usually compares the OBV line with the stock price line. Once there is a trend of deviation, it is considered to be an out and out signal. When the stock price has risen frequently and hit a new high point, OBV has failed to hit a new high, which means that the energy shortage is rising. In other words, the strength of the market has been almost used. This is a selling signal. Conversely, if the stock price falls more than a new low point, the OBV line is unwilling to fall or fall very little, not hitting a new low, indicating that the share price has fallen almost, and the rebound in the market outlook is expected. When the stock price rises and the OBV line rises slowly, it means that the stock market will continue to look good and still hold shares. When the OBV line rises in a short time, it means that the energy is about to run out and the stock price may reverse. In addition, we can observe the "zigzag" fluctuation of OBV when applied. When OBV accumulative 5 high points (or lows) occur, it can be regarded as a short-term reversal signal. When the local high point (or low point) accumulations to 9, we should pay attention to the mid-term reversal of the market.

Because the trend of OBV can partially show the movement direction of the main funds in the market, it shows that the unusual excess turnover in the current period is hovering at low price or at high price. Therefore, investors can take the lead to grasp the direction of development of the stock market or stocks. However, it should be noted that the OBV line is generally used as an important judgement method for short term fluctuation of stock market. The OBV line must be matched with the trend of stock price to be judged and analyzed.