PVI Meaning and
Definition
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PVI is an acronym that stands for Positive Volume Index. It is a technical analysis tool used in the stock market that measures the strength of price movements based on volume. The Positive Volume Index was developed by Norman Fosback and is designed to identify periods of accumulation in a particular stock or market.
The PVI calculates and tracks the rate of change in volume on days when the market closes higher than the previous day. It assumes that during these periods of positive price movement, there is a higher demand for the stock or security, leading to increased accumulation.
The PVI measures the ratio of volume on up days to the volume on down days, and multiplies it by the previous day's PVI value. This calculation creates a cumulative index that rises when buying pressure is high and falls during periods of distribution or selling pressure.
Traders and investors use the PVI to identify potential buying opportunities based on increasing accumulation or to confirm the strength of an upward price trend. Conversely, a declining PVI may signal a weakening trend or distribution phase where investors are selling off their positions.
While the Positive Volume Index is just one tool in a trader's technical analysis arsenal, it can provide valuable insights into market sentiment and help identify potential shifts in supply and demand dynamics for a particular stock.
Common Misspellings for PVI
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