Smoothed On-Balance Volume with Signal Crossovers and Divergence Detection

Summary

This indicator smooths on-balance volume to create an OBV-M line and smooths that line again for a signal line. Users can choose an exponential, simple, volume-weighted, or weighted moving average. Crossovers of OBV-M above or below its signal line define bullish and bearish signals, and optional bar coloring shows which signal occurred most recently.

It also compares five-bar oscillator fractals with corresponding price highs or lows to label regular and hidden bullish or bearish divergences. The divergence labels are offset to the center bar of the fractal, which requires later bars to confirm the turning point. Filtering controls are present in the code but disabled, and the indicator is not a trading strategy or a tested performance report. The document provides no evidence that its crossover or divergence signals predict returns; users would need to assess timing, confirmation delay, and market fit independently.

Key ideas

• OBV-M smooths classic on-balance volume, then compares it with a separately smoothed signal line.
• Crossovers above and below the signal line indicate bullish and bearish changes in the indicator.
• Fractal highs and lows in OBV-M are compared with price pivots to identify regular and hidden divergences.
• The divergence pivot is confirmed using subsequent bars, so the displayed label refers to an earlier turning point.
• The optional divergence filters are disabled, and no predictive or performance validation is supplied.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.