Yesterday, we looked at a Daily Price Chart of Baozun Inc. and noted that the stock had been making a series of lower lows and lower highs.
Today’s Daily Price Chart and OBV Chart is for Walt Disney Co. (NYSE: DIS).
The current price of DIS is trading lower than it was exactly five months ago. The On Balance Volume (OBV) Chart is shown directly below the Daily Price Chart.
Here’s what you need to know about the OBV Line: it measures how much volume is either pushing the stock up, or down. Meaning, the volume of stock that’s being sold or bought.
Using a stock’s volume in this way can confirm a downtrend by reflecting that more people are selling the stock than are buying it. Take a look at the chart below…
We can see from the OBV chart shown above that the On Balance Volume Line for DIS is sloping down.
This indicates that the volume is slower on up-days and selling pressure is exceeding buying pressure.
Selling pressure must continue to exceed selling pressure in order to sustain a price downtrend. So, the OBV Line is a simple indicator to use that confirms the price downtrend and its sustainability.
We’ll be sure to keep following Walt Disney Co., as the stock’s selling pressure exceeds its buying pressure and the price downtrend continues.
Editor, Chart Of The Day