On-balance volume (OBV) is a technical trading momentum indicator that uses volume flow to predict changes in stock price. Joseph Granville first developed the OBV metric in the 1963 book Granville's New Key to Stock Market Profits.
This indicator is based on the OBV indicator and adds 2 times the standard deviation Bollinger Band to evaluate the overbought and oversold phenomenon of the OBV indicator.
The characteristics of Bollinger Bands: According to the normal distribution phenomenon, only 5% of the cases will exceed 2 times the standard deviation of the Bollinger Bands . So when it exceeds, I use colors to mark red overbought and green oversold situations.
Usage:
1.Identify trends: Identify current stock trends by OBV's 30 average line color.
2.Breakthrough:OBV Breakthrough 30 average,signal trend may reversal.
3.Oversell and overbuy:A break below overbuy could signal a temporary end to the uptrend.
4.Divergence:When the slope of the two highs is opposite to the slope of the two highs of the indicator, a trend reversal signal may occur.