Chaikin Volume Accumulator

The Volume Accumulator is used in technical analysis to identify strengths and weaknesses in a market. It is derived from the On Balance Volume indicator, except that instead of giving all the volume to bears on red days and bulls on green days it gives a proportional amount to both depending on the relative close price. As with many trading indicators, classic divergence between the VA and the close price may indicate an incoming reversal.

As a general rule of thumb:



Price Up:
VA up = clear uptrend
VA sideways = moderate uptrend
VA down = weak uptrend

Price Sideways:
VA up = accumulation
VA sideways = no bias
VA down = distribution

Price Down
VA up = weak downtrend
VA sideways = moderate downtrend
VA down = strong downtrend