/**
* Volume Zone Oscillator
* Analyzes volume distribution across price zones to identify accumulation/distribution
*/
/**
* Calculate Volume Zone Oscillator
* @param closes Array of closing prices
* @param volumes Array of volume data
* @param period Period for volume flow calculation (default 14)
* @returns VolumeZoneOscillatorData object
*/
export function calculateVolumeZoneOscillator(closes, volumes, period = 14) {
// Minimum 5 data points required
if (closes.length !== volumes.length || closes.length < 5) {
return null;
}
// Use adaptive period
const effectivePeriod = Math.min(period, closes.length - 1);
// Calculate volume flow (rising volume on up day = positive, etc.)
const volumeFlows = [];
let totalBuyingPressure = 0;
let totalSellingPressure = 0;
for (let i = 1; i < closes.length; i++) {
const priceChange = closes[i] - closes[i - 1];
const volume = volumes[i];
let volumeFlow = 0;
if (priceChange > 0) {
// Up day
volumeFlow = volume;
totalBuyingPressure += volume;
}
else if (priceChange < 0) {
// Down day
volumeFlow = -volume;
totalSellingPressure += Math.abs(volume);
}
// No change = 0 volume flow
volumeFlows.push(volumeFlow);
}
// Calculate VZO as EMA of volume flow
const vzo = calculateEMA(volumeFlows, effectivePeriod);
if (!vzo) {
return null;
}
const finalVzo = vzo;
const volumeFlow = volumeFlows[volumeFlows.length - 1];
// Determine trend based on VZO
let trend = 'neutral';
if (finalVzo > 15) {
trend = 'accumulation';
}
else if (finalVzo < -15) {
trend = 'distribution';
}
// Calculate signal strength
const strength = Math.min(100, Math.abs(finalVzo) * 1.5);
// Check overbought/oversold levels
const overbought = finalVzo > 60;
const oversold = finalVzo < -60;
// Check zero line crosses
let bullishSignal = false;
let bearishSignal = false;
if (volumeFlows.length >= effectivePeriod + 1) {
const prevVolumeFlows = volumeFlows.slice(-effectivePeriod - 1, -1);
const prevVzo = calculateEMA(prevVolumeFlows, effectivePeriod);
if (prevVzo && prevVzo <= 0 && finalVzo > 0) {
bullishSignal = true;
}
else if (prevVzo && prevVzo >= 0 && finalVzo < 0) {
bearishSignal = true;
}
}
// Analyze volume zones
const accumulationZone = finalVzo > 40 && trend === 'accumulation';
const distributionZone = finalVzo < -40 && trend === 'distribution';
// Generate trading signal
let signal = 'neutral';
if (bullishSignal && accumulationZone) {
signal = 'buy';
}
else if (bearishSignal && distributionZone) {
signal = 'sell';
}
else if (overbought) {
signal = 'sell';
}
else if (oversold) {
signal = 'buy';
}
// Determine market condition
let marketCondition = 'sideways';
if (finalVzo > 20) {
marketCondition = 'bullish';
}
else if (finalVzo < -20) {
marketCondition = 'bearish';
}
return {
vzo: finalVzo,
volumeFlow,
buyingPressure: totalBuyingPressure,
sellingPressure: totalSellingPressure,
trend,
strength,
overbought,
oversold,
bullishSignal,
bearishSignal,
accumulationZone,
distributionZone,
signal,
marketCondition
};
}
/**
* Get VZO interpretation
* @param vzo VolumeZoneOscillatorData object
* @returns Human-readable interpretation
*/
export function getVZOInterpretation(vzo) {
const { vzo: value, trend, accumulationZone, distributionZone, bullishSignal, bearishSignal } = vzo;
let interpretation = `Volume Zone Oscillator: ${value.toFixed(2)}`;
if (accumulationZone) {
interpretation += ' - Strong accumulation zone';
}
else if (distributionZone) {
interpretation += ' - Strong distribution zone';
}
else {
interpretation += ` - ${trend} trend`;
}
if (bullishSignal) {
interpretation += ' - Bullish zero line crossover';
}
else if (bearishSignal) {
interpretation += ' - Bearish zero line crossover';
}
return interpretation;
}
/**
* Calculate volume zone analysis
* @param vzo VolumeZoneOscillatorData object
* @returns Volume zone analysis
*/
export function analyzeVolumeZones(vzo) {
const { accumulationZone, distributionZone, strength, buyingPressure, sellingPressure } = vzo;
let zoneStrength = strength;
let institutionalActivity = 'low';
let recommendedAction = 'Monitor volume patterns';
let confidence = 50;
// Analyze buying vs selling pressure
const totalPressure = buyingPressure + sellingPressure;
const pressureRatio = totalPressure > 0 ? Math.abs(buyingPressure - sellingPressure) / totalPressure : 0;
if (accumulationZone && pressureRatio > 0.3) {
zoneStrength += 20;
institutionalActivity = 'high';
recommendedAction = 'Accumulation likely - consider long positions';
confidence = 75;
}
else if (distributionZone && pressureRatio > 0.3) {
zoneStrength += 20;
institutionalActivity = 'high';
recommendedAction = 'Distribution likely - consider short positions';
confidence = 75;
}
else if (pressureRatio > 0.2) {
institutionalActivity = 'moderate';
confidence = 60;
}
zoneStrength = Math.min(100, zoneStrength);
return { zoneStrength, institutionalActivity, recommendedAction, confidence };
}
/**
* Helper function to calculate EMA
*/
function calculateEMA(values, period) {
if (values.length < period) {
return 0;
}
const multiplier = 2 / (period + 1);
let ema = values[0];
for (let i = 1; i < values.length; i++) {
ema = (values[i] - ema) * multiplier + ema;
}
return ema;
}
/**
* Calculate VZO for multiple periods
* @param closes Array of closing prices
* @param volumes Array of volume data
* @param periods Array of periods to calculate VZO for
* @returns Array of VolumeZoneOscillatorData objects
*/
export function calculateMultipleVZO(closes, volumes, periods = [14, 21, 28]) {
return periods
.map(period => calculateVolumeZoneOscillator(closes, volumes, period))
.filter((vzo) => vzo !== null);
}
