Up/Down Volume Ratio

A simple number that sums the volume of up days and down days over a period, and what real readings for the S&P 500, Corning and Avis told us.

A number for the volume pattern

The up/down volume ratio turns the idea of accumulation and distribution into a single number. Over a set period, usually 50 trading days, add up the volume on every day the stock closed higher. Then add up the volume on every day it closed lower. Divide the first total by the second.

A ratio above 1.0 means more volume traded on up days than on down days. Above about 1.5 is strong. Below 1.0 means down days carried more volume, a sign of selling pressure. Unchanged days are left out.

Unlock all of Investing School

The rest of this lesson, its chart examples and quiz are part of Investing School. Start free with Stock Market Fundamentals and the first lesson in every category.