What do the Positive Volume Index (PVI) and Negative Volume Index (NVI) primarily study?

The Positive Volume Index (PVI) and Negative Volume Index (NVI) are designed to analyze the relationship between volume and price changes. Specifically, PVI focuses on price movements when volume increases, while NVI concentrates on price movements during days when volume decreases. This dual approach helps to gauge market trends based on how volume variations relate to price action.

Since these indices directly correlate changes in volume with corresponding price changes, they effectively measure the strength of bullish or bearish trends. By observing whether the market's volume trends align with price direction, analysts can gain insights into market sentiment and the potential continuation or reversal of trends. This makes the study of closing prices and changes in volume the primary focus of PVI and NVI, which is accurately reflected in the chosen response.