Bears Power Stock Analysis & 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 stock indicator aims at identifying if a bearish stock trend will continue or if the stocks price has reached a point where it might reverse.
Calculation
A Stock Price bar has 4 parameters: the Opening, Closing, High & Low of the stock price bar.
Each Stock Price bar either closes higher or lower than the previous stock price bar.
The highest stocks price will show the maximum power of the Bulls within a stock price period.
The lowest stocks price will show the maximum power of the Bears within a stock price period.
This stock technical indicator uses the Low of the stocks price & a Moving Average (Exponential)
The moving Average represents the middle ground between sellers and buyers for a certain stock price period.
Therefore:
Bears Power = Low Stock Price - Exponential Moving Average
Stocks Analysis and How to Generate Trading Signals
Sell Trading Signal
A sell stock signal is generated when the oscillator moves below Zero.
In a down stock trend, the LOW is lower than Exponential Moving Average, so the indicator is below zero and Histogram/Oscillator is located below zero line.
Exit Trading Signal
If the LOW moves above the Exponential Moving Average then it means that stocks price are starting to rise, the histogram rises above the zero line.
The Triple Screen technique for this indicator suggests identifying the stocks price stocks 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 trend in the higher chart time frame.
