The Positive Volume Index (PVI) is a technical indicator that tracks price changes when trading volume increases compared to the previous day. It is used to understand how retail traders might be influencing the market. When the PVI rises, it indicates that increasing volume is driving prices up, which may confirm a bullish trend. Conversely, when the PVI falls during higher volume, it can signal bearish sentiment and potential price declines. Traders often use PVI with a long-term moving average, such as the 255-day EMA, to generate signals. A bullish signal occurs when the PVI crosses above its moving average, suggesting further upward movement. A bearish signal appears when the PVI crosses below its moving average, indicating possible downward pressure. Additionally, the PVI is frequently paired with the Negative Volume Index (NVI) to identify market tops and bottoms.
