80 Volume Average Weighted Price (VWAP)

Basically, volume is multiplied by price (VP). Then starting at an specific time (e.g., start of trading section), VP is added cumulatively and divided by the cumulative volume. Basically, this index average volume weighted by the price.

When VWAP moves up, it suggest that volume and prices are both moving up, and vic.

VWAP can signal different aspects of price.

If price moves above VWAP, there is momentum on the price.

VWAP

Figure 9.27: VWAP

It can also indicate if price is high or low by comparison to volume.
VWAP

Figure 9.28: VWAP

If price moves above or below VWAP, it suggest strong trend and momentum.
VWAP

Figure 9.29: VWAP