|
|
|
|
 |
|
Similar to the Chaikin Money Flow, the Chaikin oscillator (CHO) is based upon two exponential moving averages of the Accumulation/Distribution (ACDI) oscillator.
|
 click for a larger image |
The Chaikin oscillator is based upon the underlying premise of the ACDI line which is an indicator of Accumulation and Distribution. The purpose of the CHO is to detect the changes in this flow pattern by using the 2 EMA's. This method leads to divergence patterns between the stock and the indicator. When such a divergence occurs, this can be an indicator of an imminent change in trend as this would be an indicator that the market is showing one thing however the Accumulation or Distribution is displaying another, thus revealing some information that is hidden for normal view. |
|
|
|
 |
|
|
