Enhancing Financial Well-being through Technical Analysis: Evidence from OBV and Chaikin Oscillator

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DOI: https://doi.org/10.5281/zenodo.21350215

Bhawna Sachdeva and Mohit Gupta (School of Business Studies, Punjab Agricultural University, Ludhiana, Punjab)

This study looked at the performance of volume-based technical indicators in the Indian stock and commodities markets, namely the Chaikin Oscillator and On-Balance Volume (OBV), using important metrics like mean returns, success rate, profit factor, Sharpe ratio, Sortino ratio, drawdown, and volatility. The secondary data from 2011 to 2021 was collected from individual stocks and commodities on a daily basis. The results show that although OBV and Chaikin Oscillator produce trade signals frequently, their success rates are still lower than those of price-based indicators. In equity markets, especially in large-cap stocks, OBV exhibits modest profitability, but in small-cap stocks, it is linked to more volatility. In non-agricultural commodities, the Chaikin Oscillator performs comparatively better, demonstrating its applicability in volume-driven markets. Both indicators, however, have a low capacity for independent prediction. Overall, the findings highlight the value of combining volume-based indicators with other technical indicators for better decision-making and indicate that they are more useful as supplemental tools for verifying trends than as main trading methods.