Loading ...Silver Daily: OBV
The idea behind On Balance Volume (OBV) is that “volume precedes price” – so if a security is showing an increasing OBV indicator it is a signal that buying pressure (volume) is increasing on upward price moves.
Joseph Granville, who developed the metric, believed that when volume increases sharply without a significant change in the stock’s price, that price will eventually jump upward, and vice versa.
In the daily Silver chart I recently posted (posted again below), we can see that a breakout in the OBV indicator led the eventual price breakout above the $18.00 level by approximately 2 months.
Taking a step back and looking longer term for Silver, we can really see that what OBV is indicating momentum-wise is truly astounding. With price presently at $20, OBV is already displaying breakouts above buying-power levels associated with previous price peaks at $21.50, $35, and $38 – $44! Just more evidence that we have hopped aboard a historically mammoth wave in the making…
Excellent post. Thank you.
RTV, you are sharing some great charts. Thanks for your contributions…