The Volume Oscillator is derived by taking the difference between two moving averages of the volume of an asset expressed as a percentage. The oscillator can also be used for confirming breakouts. If a support or resistance level breaks on increasing volume, it can help indicate that a stronger move may come. Conversely, a break of support or resistance on low volume may indicate a false breakout or a smaller move to come.

When Volume Oscillator is above the Zero-Line, this signifies that the shorter-term volume moving average is above the longer-term volume moving average indicating the short term trend is higher than the longer-term volume trend.

When Volume Oscillator is below the Zero-Line, this signifies that the longer-term volume moving average is below the shorter-term volume moving average indicating the long term volume trend is higher than the short-term volume trend.

Calculation:

Volume Oscillator = 100 * SMASHR – SMALNG  /  SMALNG
Where:

SMASHR = Shorter Period SMA of Volume

SMALNG = Longer Period SMA of Volume