Learn the stock market › Indicators › Lesson 6 of 7
Volume indicators
AMD, the last year
Price
OBV for AMD, millions of shares from a year ago
OBV20-day average
OBV: volume as a running total
On-balance volume starts at zero. On a day the stock closes higher, that day's volume is added. On a day it closes lower, the volume is subtracted, and on an unchanged day nothing happens. Joe Granville described it in 1963, and his idea was that volume moves before the price.
Here are the last five days for AMD, starting from zero.
| Day | Close | Volume, millions | OBV, millions |
|---|---|---|---|
| Nov 2, 2026 | 466.84 (down) | 32.14 | −32.14 |
| Nov 3, 2026 | 483.90 (up) | 35.26 | 3.11 |
| Nov 4, 2026 | 488.78 (up) | 50.98 | 54.10 |
| Nov 5, 2026 | 404.40 (down) | 71.24 | −17.14 |
| Nov 6, 2026 | 449.04 (up) | 45.76 | 28.62 |
The number itself means nothing, because it depends on the day you start. Only the direction counts.
Does OBV point another way than the price?
The interesting question is when the two part ways, for example when the price rises while OBV falls. We compared the last 20 trading days, every day since 2010, for the 20 largest US companies.
| State | Of days | Had risen after three months | On average |
|---|---|---|---|
| Price and OBV up | 50% | 67% | +6.9% |
| Price and OBV down | 32% | 69% | +7.9% |
| Price up, OBV down | 10% | 67% | +6.3% |
| Price down, OBV up | 7% | 68% | +7.0% |
| All days | 100% | 68% | +7.2% |
The price and OBV pointed the same way on 82% of days, so the line mostly repeats what the price already shows.
Even when they parted ways, the stock had risen about as often after three months as on all days together. The differences can't be told apart from chance.
What happened when OBV crossed its average?
This is the same test as in the lesson on RSI: the day OBV crossed over or under its 20-day average, at most once a month per company, against the same company's ordinary day.
| After three months | OBV over its average | OBV under its average | Ordinary day |
|---|---|---|---|
| Times | 2,167 | 2,176 | – |
| Had risen | 67.3% | 68.6% | 67.7% |
| On average | +7.1% | +7.3% | +7.1% |
The differences in average rise can't be told apart from chance, after one, three or twelve months.
VWAP: the day's average price
VWAP, volume-weighted average price, is the average price during a day, with each trade weighted by how many shares it covered. It starts over each trading day and can't be worked out from daily data, because it needs the trading during the day. So it isn't tested here.
It is mostly used to compare a trade with how others traded that day, such as whether a large order got a better or worse price than the day's average.
Volume against an ordinary day
The simplest measure compares today's volume with the average of the last 20 days. AMD traded 1.7 times its average on Nov 6, 2026. High volume shows that many traded, but not which way they think the price will go, because every share sold also has a buyer.
Test yourself
A stock rises on high volume, but OBV sits under its average. What do you know for certain?
More numbers are on the AMD stock page.
Sources
- StockCharts ChartSchool, On Balance Volume: who developed it, the calculation and Granville's idea, read on 5 November 2026.
- StockCharts ChartSchool, VWAP: the calculation and why it isn't defined for daily data, read on 5 November 2026.