Bears Power Stock Indices Technical Analysis & 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 may reverse.
Calculation
A Indices Price bar has 4 parameters: the Opening, Closing, High & 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 show the maximum power of the Bulls within a stock index price period.
The lowest stock index price will show the maximum power of the Bears within a stock index price period.
This indices technical indicator uses the Low of the stock index price & a Moving Average (Exponential)
The moving Average represents the middle ground between sellers & buyers for a certain stock index price period.
Therefore:
Bears Power = Low Indices Price - Exponential Moving Average
Stock Indices Technical Analysis & How to Generate Signals
Sell Stock Indices Signal
A sell signal is generated when 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 Trading 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 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 direction of the long term stock indices trend in the higher chart time frame.
