OBV divergence: when volume disagrees with price

On-Balance Volume is a cumulative total. On any day price closes higher, that day's entire volume is added; on a down day, it is subtracted. The absolute value of OBV is meaningless — it depends on where the count started. Only its direction and shape carry information.

The premise is that volume tends to move before price: sustained accumulation shows up as a rising OBV even during periods when price is flat or drifting.

When price and OBV rise together, participation is confirming the move — the advance is being bought, not drifting up on thin trade. When they fall together, the decline is likewise backed by real selling.

Divergence is the more interesting case. Price rising while OBV falls means the advance is happening on progressively weaker participation, which is the classic bearish divergence. Price falling while OBV rises is the bullish mirror image, sometimes read as accumulation into weakness.

This site scores confirmation at ±0.5 and divergence at ±1. That asymmetry is intentional. Confirmation is the ordinary case and tells you little you could not see from the price chart; divergence is the condition where volume is contributing information price alone does not have.

The lookback is 10 bars — long enough to be more than a single day's noise, short enough to still describe current conditions. As with every window on this site, it is a chosen convention rather than an optimised one.