Loren.... here we go... NVI and PVI definitions:
Note that those, in my book, are "weak" T.A. indicators. At times they work extremely well. I still consider RSI, MACD, OBV, MVA averages, trendlines, Bollingers Bands as my primary and stochastics as my primary indicators. At this point those show that PIXR is slightly on the oversold side, but no real multiple buys signals at this point.
Here are the definitions (From Equis-Metastock that I use)
The Negative Volume Index (NVI) relates a decrease in volume to the change in the security's price. When volume decreases from the previous day, the NVI is adjusted by the percentage change in the security's price.
If (V < (ref(V,-1)) then
NVI = I + (((C - ref(C,-1) / ref(C,-1)))
If (V >= ref(V,-1)) then
NVI = I
Where:
C = Today's closing price
ref(C,-1) = Yesterday's closing price
I = Yesterday's Negative Volume Index
NVI = Today's Negative Volume Index
V = Today's volume
ref(V,-1) = Yesterday's volume
The NVI is constructed so it only displays changes on days when volume decreases from the previous day. Because falling prices are usually associated with falling volume, the NVI will usually trend downward.
See Plotting an Indicator for more information on plotting indicators. See Negative Volume Index for more information on the NVI parameters.
Interpretation of the NVI assumes that on days when volume increases, the crowd-following "uninformed" investors are in the market. Conversely, on days with decreased volume, the "smart money" is quietly taking positions. Thus, changes shown in the NVI (remember that the NVI changes only on lower volume days) display what the smart money is doing.
Stock Market Logic, by Norman Fosback, points out that the odds of a bull market are 95 out of 100 when the NVI of the Dow Industrials is above its one-year moving average.
The Positive Volume Index (PVI) relates an increase in volume to the change in the security's price. When volume increases from the previous day, the PVI is adjusted by the percentage change in the security's price.
If (V > ref(V,-1)) then
PVI = I + (((C - ref(C,-1)) / ref(C,-1)))
If (V <= ref(V,-1)) then
PVI = I
Where:
C = Today's closing price
ref(C,-1) = Yesterday's closing price
I = Yesterday's Positive Volume Index
PVI = Today's Positive Volume Index
V = Today's volume
ref(V,-1) = Yesterday's volume
The PVI is constructed so it only displays changes on days when volume increases from the previous day. Because rising prices are usually associated with rising volume, the PVI will generally trend upward.
See Plotting an Indicator for more information on plotting indicators. See Positive Volume Index for more information on the PVI parameters.
The interpretation of the PVI is the opposite of the NVI (see Negative Volume Index). The PVI seeks to show what "uninformed" investors are doing. |
