Bears Power Oil Technical Analysis and Bears Power Trading 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 & bears.

This technical indicator aims at identifying if a bearish oil trend will continue or if the crude oil price has reached a point where it may reverse.

Calculation

A Oil Trading Price bar has 4 parameters: the Opening, Closing, High and Low of the oil price bar.

Each Oil Trading Price bar either closes higher or lower than previous oil price bar.

The highest crude oil price will indicate the maximum power of the Bulls within a oil price period.

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

This technical indicator uses the Low of the crude oil price and a Moving Average (Exponential)

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

Therefore:

Bears Power = Low Oil Trading Price - Exponential Moving Average

Oil Trading Technical Analysis & Generating Trading Signals

Sell Trading Signal

A sell oil signal is generated when the oscillator moves below Zero.

In a down crude oil trend, the LOW is lower than EMA, so the indicator is below zero & Histogram/Oscillator is located below zero line.

Exit Trading Signal

If the LOW moves above the EMA then it means that crude oil price are starting to rise, the histogram rises above the zero line.

The Triple Screen method for this indicator suggests identifying the crude oil price oil 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 the direction of the long term oil trend in the higher chart timeframe.