Positive Volume Index (PVI)

The positive volume index is the complement of the NVI. It accumulates percentage price changes only on days when volume expanded. In the Dysart and Fosback framing, those are the active, public days. A rising PVI says the heavy-volume days have been up days. A falling PVI says the heavy days have been down days. That is close to what a volume-weighted return would tell you, with the quiet days left out entirely.

PVI moves on the bars most traders already notice, because those are the high-volume bars. It will look more like the price trend than NVI does. The interesting moment is disagreement: NVI rising and PVI falling means quiet days are up and active days are down. That split is worth seeing on the price chart directly. It may be a market that drifts up and sells off on news, or it may be noise.

Use PVI to confirm whether volume expansion is happening in the direction of the trend you want to trade. An uptrend in which PVI is falling is an uptrend whose busy days are down days, which is a weaker structure than the price chart alone suggests. Pair it with NVI if you want the quiet days too. Do not add them and pretend you have created OBV. The construction is different.

Trading PVI crosses of a moving average as a complete strategy because a textbook plotted one. Also using PVI on assets without meaningful volume. If every "volume" change is a tick-count flicker, the index is a random subsample of returns.

PVI ignores every quiet bar by design, so it will not warn you about a deterioration that shows up only on light trade. And a single active day dominates the next reading. Check the date before you generalise.