Bulls Power Stock Indices Analysis and Bulls Power Signals

Developed by Alexander Elder

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

This indicator aims at identifying if a bullish trend will continue or if the stock price has reached a point where it may reverse.

Calculation

A Indices Price bar has four parameters: the Opening, Closing, High & Low of the stock price bar.

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

The highest stock price will show the maximum power of the Bulls within a stock price period.

The lowest stock price will show the maximum power of the Bears within a stock price period.

This Technical Indicator uses the High of the stock price & a MA (Exponential MA)

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

Therefore:

Bulls Power = High Price - Exponential Moving Average

Bulls Power

Stock Indices Analysis and How to Generate Trade Signals

Buy Signal

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

In an up stock trend, the HIGH is higher than Exponential MA, so the Bulls Power is above zero & Oscillator is located above the zero line.

Exit Trade Signal

If the HIGH falls under EMA then it means that stock price are starting to fall, the Bulls Power histogram dropfallsdrops below the zero line.

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