Yesterday, there were some technical difficulties getting the Chart of the Day out. You can go here to check it out.
You’ll notice that we looked at a monthly price chart of Veeva Systems Inc. (NYSE: VEEV), noting the stock’s 1-month price is trading above the 10-month SMA signaling a bullish trend.
Switching gears, today’s chart is for Docusign, Inc. (NYSE: DOCU)
DocuSign, Inc. provides cloud-based software in the United States and internationally. The company provides e-signature solutions that enable businesses to digitally prepare, execute, and act on agreements. It also offers DocuSign CLM, which automates workflows across the entire agreement process, Intelligent Insights that use artificial intelligence to search and analyze agreements by legal concepts and clauses, and more.
Now, the Daily Price Chart below shows that DOCU is in a price uptrend because the current price of DOCU is trading higher than it was exactly six months ago. The On Balance Volume (OBV) chart is shown below the Daily Price Chart.
On Balance Volume measures volume flow with a single easy-to-read line. Volume flow precedes price movement and helps sustain the price uptrend. When a stock closes up, volume is added to the line. When a stock closes down, volume is subtracted from the line. A cumulative total of these additions and subtractions form the OBV line.
We can see from the OBV chart shown above that the On Balance Volume line for DOCU is sloping up. An up-sloping line indicates that the volume is heavier on up days and buying pressure is exceeding selling pressure. Buying pressure must continue to exceed selling pressure in order to sustain a price uptrend. So, that means that On Balance Volume is a simple indicator to use that confirms the price uptrend and its sustainability.
The numerical value of the On Balance Volume line is not important. We simply want to see an up-sloping line to confirm a price up trend, which is displayed in the chart above.
We’ll be sure to keep following Docusign, Inc., as the stock’s buying pressure exceeds its selling pressure and the price uptrend continues.
Editor, Chart Of The Day