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The Positive Volume Index ( PVI ) is a cumulative indicator which only moves when volume is increasing. The Underlying premise behind this indicator is that general investors take their positions on days of rising volume, whereas the informed investors take their positions when volume is decreasing.
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The assumption behind this indicator is that it shows what the 'crowd' investors are doing, since it only reacts on increasing volume days. It is best used as a divergence indicator, and as such is best used as a support to more direct indicators and analysis |
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