The positive volume index (PVI) is an indicator used in technical analysis that provides signals for price changes based on positive increases in trading volume. A PVI can be calculated for popular market indexes. It can also be used to analyze movements in individual securities. It helps in assessing trend strength and potentially confirming price reversals.


  • The PVI is based on price moves depending on whether the current volume is higher than the previous period.
  • If volume doesn't increase from one period to the next, the PVI stays the same.
  • The PVI is often shown as a moving average (to help smooth out its movements) and compared to a one year average (255 days).
  • Traders watch the relationship of a nine-period PVI moving average (or other MA length) relative to the 255-period PVI moving average.
  • When the PVI is above the one-year average it helps confirm a price rise. When the PVI drops below the one-year average it helps confirm a price drop.


PVI is typically followed in conjunction with a negative volume index (NVI) calculation. Together they are known as price accumulation volume indicators.

PVI and NVI were first developed in the 1930s by Paul Dysart, who used market breadth indicators such as the advance-decline line to generate the PVI and NVI. The PVI and NVI indicators gained popularity following their inclusion in a 1976 book titled "Stock Market Logic" by Norman Fosback, who expanded their application to individual securities.

Fosback's research, which encompassed the period from 1941 to 1975, suggested that when the PVI is below its one year average there is a 67% chance of a bear market. If the PVI is above its one year average, the chance of a bear market drops to 21%.

Generally, traders will watch both PVI and NVI indicators to get a sense of the market’s trend in terms of volume. PVI will be more volatile when volume is rising and NVI will be more volatile when volume is decreasing.

Since the primary factor of PVI is price, traders will see the PVI increasing when volume is high and prices are increasing. The PVI will decrease when volume is high but prices are decreasing. Therefore, the PVI can be a signal for bullish and bearish trends.

The general belief is that high volume days are associated with the crowd. When the PVI is above its one-year moving average (about 255 trading days), it shows that the crowd is optimistic which helps fuel price rises. If the PVI falls below the one-year average, that signals the crowd is turning pessimistic, and a price decline is forthcoming or is already underway.

To find out more about this indicator and it`s trading signals click here.

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