Bulls Power Stock Indices Technical Analysis and Bulls Power Stock Indices Signals

Developed by Alexander Elder

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

This indices technical indicator aims at identifying if a bullish 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 Indicator uses the High 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:

Bulls Power = High Indices Price - Exponential Moving Average

Bulls Power

Stock Indices Technical Analysis and Generating Stock Indices Signals

Buy Stock Indices Signal

A buy stock indices signal is generated when the Bulls Power oscillator moves above Zero.

In an up stock index trend, the HIGH is higher than EMA, so the Bulls Power is above zero and Histogram/Oscillator is located above zero line.

Exit Signal

If the HIGH falls under EMA then it means that stock index price are starting to fall, the Bulls Power histogram fall below 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 bulls power on a lower chart interval (like hourly time frame). Signals are traded according to the indicator but only in the direction of the long term stock indices trend in the higher time frame.