A close above the mean price is given a positive value and a close below the mean a negative value. When the market closes at either the high or low of the day, the volume is given full value. Lagging volume on an upward move is often a forewarning of a weakening market. Interpretation Divergence between volume and price movement is often the sign that a reversal is about to take place. In the short and intermediate term, the VAO helps to identify market tops and bottoms by sensitively comparing volume to price action.
Most indicators are most effective when used in conjunction with other, complimentary indicators.