Technical Analysis method that tries to pinpoint when a security's shares are being accumulated (being bought) or are being sold is known as.
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A. B. C. D.B
The correct answer to the question is B. On Balance Volume (OBV).
Technical Analysis is a method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. It is based on the idea that market trends, both up and down, can be identified and used to make investment decisions.
On Balance Volume (OBV) is a technical analysis indicator that measures buying and selling pressure by adding the volume of each trading period either to or subtracting it from a running total. OBV attempts to detect when a financial instrument's shares are being accumulated (being bought) or being sold.
The theory behind OBV is that changes in the volume precede price changes. Therefore, if a security is being accumulated, the volume should increase, and the price should eventually follow suit. Conversely, if a security is being distributed, the volume should decrease, and the price should follow suit.
OBV is calculated by adding the day's volume to a cumulative total if the price closes higher than the previous day's close or by subtracting the day's volume from the cumulative total if the price closes lower than the previous day's close. If the price closes unchanged, the volume is ignored.
The OBV line can be used as a trend confirmation tool or as a leading indicator. When the OBV line is moving in the same direction as the price, it confirms the trend. When the OBV line diverges from the price, it may indicate an upcoming price reversal.
In conclusion, On Balance Volume is a technical analysis method that attempts to pinpoint when a security's shares are being accumulated or being sold by analyzing trading volume. It can be used as a trend confirmation tool or as a leading indicator.