Bulls Power Stock Indices Technical Analysis & 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 & 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 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 Indicator uses the High 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:
Bulls Power = High Indices Price - Exponential Moving Average
Bulls Power
Stock Indices Technical Analysis & How to Generate Trading Signals
Buy Stock Indices Signal
A buy signal is generated when 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 & Histogram/Oscillator is located above zero line.
Exit Trading 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 technique for this indicator suggests identifying the stock index price 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.
