Negative Volume Index

The Negative Volume Index is an indicator that relates a decrease in volume to the change in the price of the stock. When the volume decreases compared to the previous time period, the Negative Volume Index is adjusted by the percentage change in the stock price. The Negative Volume Index assumes that the volume increases when “uninformed” investors enter the market and decreases when “strong hands” quietly take position. Thus, changes in the Negative Volume Index show that there are profits taking.

Operation:
BUY signals occur when the Negative Volume Index is increasing;
SELL signals occur when the Negative Volume Index is decreasing.
Very useful also used with the “Positive Volume Index”, the intersections of the latter may indicate the beginning of a period of lateralization of the security.