I was analyzing the volume movements in the market, and it reminded me of an indicator that is often underrated: the OBV, or On Balance Volume. It’s a fascinating tool because it directly links volume to price movements.

What’s interesting about OBV is that it doesn’t just look at the price, but how volume behaves when the price goes up or down. If volume increases during bullish days and remains higher than during bearish days, that’s a strong signal that the trend might continue. The slope of the OBV line is what really matters, not the absolute numbers like with other indicators.

I’ve noticed something particular: when volume rises but the price stays stable, it often means institutional operators are quietly accumulating. They buy from retail traders at low prices, wait, and then sell when the price goes up. This is a dynamic that OBV captures well.

The steeper the indicator’s slope, the stronger and more convincing the movement. If you see a gradual and steady rise, you can be more confident. If the line crashes, it’s a warning that the trend might reverse. That’s the real value of OBV: it shows whether there’s genuine conviction behind the price movement or if it’s just noise.

It’s an indicator I prefer to use in combination with other tools, but on its own, it can already give you many clues about what’s happening beneath the surface of the market.