Bears Power Stock Indices Technical Analysis and Bears Power Stock Indices Signals

Developed by Alexander Elder

Bears Power is used to estimate power of the Bears (Sellers). Bears Power estimates the balance of power between the bulls and bears.

This indices technical indicator aims at identifying if a bearish stock indices trend will continue or if the stock index price has reached a point where it might reverse.

Calculation

A Indices Price bar has 4 parameters: the Opening, Closing, High and Low of the stock index price bar.

Each Indices Price bar either closes higher or lower than the previous stock index price bar.

The highest stock index price will indicate the maximum power of the Bulls within a stock indices price period.

The lowest stock index price will indicate the maximum power of the Bears within a stock indices price period.

This indices technical indicator uses the Low of the stock index price and a Moving Average (Exponential)

The moving Average represents the middle ground between sellers and buyers for a certain stock index price period.

Therefore:

Bears Power = Low Indices Price - Exponential Moving Average

Stock Indices Technical Analysis and Generating Stock Indices Signals

Sell Stock Indices Signal

A sell stock indices signal is generated when the oscillator moves below Zero.

In a down stock index trend, the LOW is lower than EMA, so the indicator is below zero and Histogram/Oscillator is located below zero line.

Exit Signal

If the LOW moves above the EMA then it means that stock index price are starting to rise, the histogram rises above the zero line.

The Triple Screen method for this indicator suggests identifying the stock index price stock index trend on a higher chart interval (like daily time frame) and applying the bears power signals on a lower chart interval (like hourly time frame). Signals are traded according to the lower time frame but only in the direction of the long term stock indices trend in the higher chart time frame.