The Price and Volume Trend ("PVT") is similar to On Balance Volume ("OBV,") in that it is a cumulative total of volume that is adjusted depending on changes in closing prices. But where OBV adds all volume on days when prices close higher and subtracts all volume on days when prices close lower, the PVT adds/subtracts only a portion of the daily volume. The amount of volume added to the PVT is determined by the amount that prices rose or fell relative to the previous day's close.
The interpretation of the Price and Volume Trend is similar to the interpretation of On Balance Volume and the Volume Accumulation/Distribution Line.
The bullish divergence (the PVT was trending higher while prices trended lower) was followed by a strong price increase.
The PVT is calculated by multiplying the day's volume by the percent that the security's price changed, and adding this value to a cumulative total.
for example, if the security's price increased 0.5% on volume of 10,000 shares, we would add 50 (i.e., 0.005 * 10,000) to the pvt. if the security's price had closed down 0.5%, we would have subtracted 50 from the pvt.
information for this article was derived from the book, technical analysis from a to z by steven b. achelis