InvestorQ : How does the negative volume index (NVI) work in practice for a trader?
Katherine Gonsalves made post

How does the negative volume index (NVI) work in practice for a trader?

Answer
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Rutuja Nigam answered.
1 year ago


How exactly can you approach the NVI? It can actually be compared with its one-year (255 bars) moving average. When NVI is above the moving average, the empirical research has shown that there is a 96% chance that a bull market is in progress. On the other hand, when the NVI is below the moving average, there is a 53% chance of a bear market. As with all indicators, NVI should not be used on its own. NVI has the capacity to capture more medium to long term trends in the market and that is why even fundamental investors tend to use this measure quite frequently. It needs to be used only in conjunction with other measures of stock price direction and momentum.