Patterns › OBV bullish divergence vs OBV bearish divergence
Look-alikes
OBV bullish divergence vs OBV bearish divergence
They look alike, so beginners mix them up. Here is what each one means, and how often each one worked on real charts.
OBV bullish divergence
Price made a lower low, but volume flow made a higher low. Sellers were running out of force.
OBV, or on-balance volume, is a running total: it adds a candle's volume when the close is higher than the last close, and subtracts it when the close is lower. A bullish divergence is when price makes a lower low but OBV is higher at the second low than at the first. It hints that selling pressure is fading. In our library it is confirmed when price closes above the high of the second low's candle.
Acting on the divergence alone, before price confirms by closing above the second low's candle.
OBV bearish divergence
Price made a higher high, but volume flow made a lower high. Buyers were running out of force.
OBV adds a candle's volume when the close is higher than the last close, and subtracts it when the close is lower. A bearish divergence is when price makes a higher high but OBV is lower at the second high than at the first. It hints that buying pressure is fading. In our library it is confirmed when price closes below the low of the second high's candle.
Acting on the divergence alone, before price confirms by closing below the second high's candle.
Real odds side by side
| Pattern | Found | Target first | Stop first | Went nowhere |
|---|---|---|---|---|
| OBV bullish divergence | 8,280 | 36% | 55% | 9% |
| OBV bearish divergence | 8,774 | 37% | 55% | 8% |
Counted by the Trading Class research engine on real past candles: entry at the signal candle's close, target 1.5 × ATR(14), stop 1 × ATR(14), 12 candles to decide, a candle that touches both counts as the stop. How we count. Past data, not a forecast and not advice.