On Balance Volume Test #2 - Tesla
I have been back testing the On Balance Volume indicator (OBV). So far, so good. I did not publish my first test (Facebook), but will publish from here on.
OBV is basically an accumulation/distribution indicator. When there is divergence, it shows weakening/strengthening markets. If you are unfamiliar with OBV, look it up.
Here is what I found with Tesla:
OBV test 2: TSLA
Tesla started becoming volatile in 2014.
Tesla set a new all-time at #1. Leading up to the 2nd all-time high (#2), notice the OBV flattened out. It was weak on the move up. They soon corrected.
On the 3rd attempt (#3) to reach their all time high (#2), the OBV was trending down.
On the 4th try, the share price could not reach their all time high, but the OBV was showing signs of strengthening. It soon corrected again.
But, on the 5th try to set a new high, the OBV had rebounded quite well from its low and was trending up nicely. The OBV also climbed higher than the OBV from #4 high.
Tesla soon broke out of their long channel and went up substantially from there.
It is my opinion that OBV gave warning signs that Tesla was not ready to break out. The conviction was not there until after the #4 high. Also, notice the OBV up moves were stronger than the OBV down moves... with the exception of the OBV from #1 to #2. But, the move from #1 to #2 was telling you the opposite - it was telling you the down moves were stronger than the up moves, therefore the sustainability of the new all-time high (#2) was not that great.
Lol, I hope you can understand my cluster of lines and numbers on my chart
As I always say... this should NOT be taken as advice. Always do your own research before making any investment decision.
OBV is basically an accumulation/distribution indicator. When there is divergence, it shows weakening/strengthening markets. If you are unfamiliar with OBV, look it up.
Here is what I found with Tesla:
OBV test 2: TSLA
Tesla started becoming volatile in 2014.
Tesla set a new all-time at #1. Leading up to the 2nd all-time high (#2), notice the OBV flattened out. It was weak on the move up. They soon corrected.
On the 3rd attempt (#3) to reach their all time high (#2), the OBV was trending down.
On the 4th try, the share price could not reach their all time high, but the OBV was showing signs of strengthening. It soon corrected again.
But, on the 5th try to set a new high, the OBV had rebounded quite well from its low and was trending up nicely. The OBV also climbed higher than the OBV from #4 high.
Tesla soon broke out of their long channel and went up substantially from there.
It is my opinion that OBV gave warning signs that Tesla was not ready to break out. The conviction was not there until after the #4 high. Also, notice the OBV up moves were stronger than the OBV down moves... with the exception of the OBV from #1 to #2. But, the move from #1 to #2 was telling you the opposite - it was telling you the down moves were stronger than the up moves, therefore the sustainability of the new all-time high (#2) was not that great.
Lol, I hope you can understand my cluster of lines and numbers on my chart
As I always say... this should NOT be taken as advice. Always do your own research before making any investment decision.
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