On Balance Volume Index calculation in MSN Money

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Article ID: 222503 - View products that this article applies to.
This article was previously published under Q222503
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SUMMARY

This article defines the On Balance Volume Index and explains how it is calculated.

MORE INFORMATION

The On Balance Volume Index is based on the average trade volumes, average trade volumes for days when the stock price increased, and final stock prices for the last four weeks compared to the same information for the previous four weeks. The On Balance Volume Index for a stock increases as the prices and trade volumes for the stock increase. This can be an indication of significant buying activity.

The On Balance Volume Index is based on this formula:
300 x (S1 x P1 x V1) / (S0 x P0 x V0)
These values are defined in the following table:

Value Definition
S1 The average daily volume of shares traded in the last 4 weeks.
S0 The average daily volume of shares traded in the previous 4 weeks.
P1 The stock price at the end of the last 4 weeks.
P0 The stock price at the end of the previous 4 weeks.
V1 The average daily shares traded in the last 4 weeks on days when the stock price increased.
V0 The average daily shares traded in the previous 4 weeks on days when the stock price increased.
Note The most significant increases in this index occur when stock price and trading volume both significantly increase.

The On Balance Volume search in the stock finder in MSN Money Investing uses the the figure for On Balance Volume reported by Media General.

There is a significant difference between the definition of On Balance Volume in the MSN Money Investing Glossary and the definition of On Balance Volume Index on the Media General Web site. This is because On Balance Volume is based on daily price and volume data, and the On Balance Volume Index is based on price and volume data for a pair of 4 week periods.

Properties

Article ID: 222503 - Last Review: February 21, 2014 - Revision: 3.0
APPLIES TO
  • MSN Money
  • MSN Money Plus
Keywords: 
kbnosurvey kbarchive kbinfo kbmoneyinvest KB222503

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