Negative Volume Index - NVI

Sometimes you get twins that are opposites of each other. The blond and the brunette. The smart one and the jock. The gang leader and the police detective.

In technical analysis, you have the Negative Volume Index and the Positive Volume Index.

Both of these indices represent indicators in technical analysis that relate price movements to relative volume levels on a given day. The NVI looks at days when the volume goes down. PVI looks at days when the volume goes up.

You buy 100 shares of AMZN at $1,867.23. The $1,867.23 figure is the price. The 100 shares gets counted as volume.

All those individual transactions get counted together to give every trading session a volume total. AMZN trades about 4.5 million shares on an average day. This means that, during a typical session, 4.5 million shares of AMZN traded hands in all the various transactions that took place.

You're a technical analyst looking at trading on Monday, Tuesday, and Wednesday of this week. Monday saw 4.5 million shares traded. Tuesday had a volume figure of 5.5 million. Wednesday had volume of 5 million. Tuesday was an up day in terms of volume. The figure of 5.5 million was higher than the previous day (Monday), when volume was only 4.5 million. Wednesday, meanwhile, gets counted as a down day. It's volume figure was down from the previous day (Tuesday in this case), dipping to 5 million from the prior session's 5.5 million.

So, in the PVI versus NVI consideration, Tuesday would get counted for the Positive Volume Index and Wednesday would get counted for the Negative Volume Index.

PVI and NVI each create a kind of trend line, relating price movements to volume. A technical trader can track changes in the PVI and NVI to help them predict how a stock will move in the future.