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Ultimate Oscillator Stock Indices Technical Analysis and Ultimate Oscillator Stock Indices Signals

Originally developed and used to trade stocks and commodities markets.


This oscillator aims at striking a balance between leading signals and lagging signals given by the common indicators.


  • Leading - some indicators lead the stock indices market and give signals earlier than the optimum time

  • Lagging - some indicators lag the stock indices market so far that half of the move is over before a signal is generated.


This is the balance that the oscillator aims to strike, not to lead too much or lag too much - this way the oscillator will always give a signal at the ultimate time, thus its name.

Ultimate Oscillator Technical Stock Indices Indicator



This indicator uses 3 different n-number of candlesticks and calculates the combined weighted sums of stock index price action from these candlesticks and plots these values a scale ranging from 0 to 100. Values of above 70 are considered to be overbought levels while values of below 30 are considered to be oversold levels.


The time periods used to calculate the ultimate oscillator are 7 periods (short term trend), 14 periods (intermediate term trend) and 28 periods (long term trend).



Stock Indices Technical Analysis and Generating Stock Indices Signals


This Indices technical indicator can be used in generating buy and sell stock indices signals using various methods.


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Center line Crossover Signal

Buy Stock Indices Signal - values above 50 center line level

Sell Stock Indices Signal - values below 50 center line level

Buy Sell Stock Indices Signals

Center line Crossover Signal


Overbought/Oversold Levels

Overbought - levels above 70 - sell stock indices signal

Oversold - levels below 30 - buy stock indices signal


Divergence Stock Indices

The oscillator can also be used to trade divergence stock index trading signals, below is an example of a classic bearish divergence signal.

Divergence Stock Indices

Technical Analysis

 

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