Pullbacks and Divergence: Stoch-OBV and MACD-OBV

In his guide to MIDAS, Andrew Coles introduced several new extensions for MIDAS including Stoch-OBV and MACD-OBV. These powerful indicators step in where Paul Levine left off. To determine if the MIDAS curve would hold price, Levine typically used OBV for divergences. This method is not always accurate, and some consider OBV limited since volume does not always precede price action.

Stoch-OBV is an oscillator that provides more consistent overbought and oversold signals and can be applied to any MIDAS curve. The oscillator usually hits overbought/oversold levels when price is challenging a MIDAS curve during a pullback. This indicator can also be used for divergences.

MACD-OBV provides powerful divergence signals, with much higher reliability that OBV alone. It can be used to determine whether MIDAS curves will hold price during a pullback (whether price will bounce from the MIDAS curve or slice through it to form a new counter-trend).

These indicators are being made available for free. You can download them here: Please contact us if you'd like to learn more about these indicators or try our other tools, including point-and-click MIDAS curves, TopFinder, and more.