DEFINITION of 'Negative Volume Index  NVI'
A technical indicator that relies on changes in a security’s volume to identify when smart money is driving the current trend. The Negative Volume Index suggests that unsophisticated investors buy and sell primarily on highvolume days, while shrewd investors are more likely to trade on lowvolume days. The concept was developed by Paul Dysart in the 1930s and later refined by Norman Fosback.
INVESTOPEDIA EXPLAINS 'Negative Volume Index  NVI'
Often when volume drops, price drops. If a stock’s price increases despite a decrease in volume, technical analysts consider this a positive sign. They use the negative volume index to help identify bull and bear markets.
To determine the Negative Volume Index:
1. Use 1000 as the starting point for Cumulative NVI
2. Add the Percentage Price Change to Cumulative NVI when volume decreases (NVI remains unchanged when volume increases)
3. Create a 255day exponential moving average
Followers of the NVI believe a bull market is likely when NVI is above its 255day moving average and that a bear market is in store when the index drops below the moving average. Theorist Norman Fosback has acknowledged, however, that the NVI has historically been far more effective at predicting bull markets than downward trends.

Positive Volume Index  PVI
An indicator used in technical analysis that is based on days ... 
Index
A statistical measure of change in an economy or a securities ... 
Down Volume
A stock volume that closes at a price lower than the previous ... 
Volume
The number of shares or contracts traded in a security or an ... 
Up Volume
A stock volume that closes at a price higher than the previous ... 
Indicator
Indicators are statistics used to measure current conditions ...

What are the best technical indicators to complement the Positive Volume Index (PVI)?
Some of the best technical indicators to complement use of the positive volume index (PVI) are the negative volume index ... Read Full Answer >> 
What are the best technical indicators to complement the Negative Volume Index (NVI)?
The negative volume index (NVI) was not created to be used as the basis for a standalone trading strategy. Therefore, it ... Read Full Answer >> 
What is a common strategy traders implement when using the Negative Volume Index ...
A common strategy traders implement using the negative volume index (NVI) is to use it to help obtain a more optimal trade ... Read Full Answer >> 
What is the Negative Volume Index (NVI) formula and how is it calculated?
There are two distinct versions of the Negative Volume Index, or NVI, along with one hybrid version that draws from both. ... Read Full Answer >> 
Why is the Negative Volume Index (NVI) important for traders and analysts?
The Negative Volume Index (NVI), along with its cousin the Positive Volume Index (PVI), is one of the oldest technical indicators ... Read Full Answer >>

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