Bulls Power Stock Analysis & Bulls Power Trading Signals
Created 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 stock indicator aims at identifying if a bullish 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 trading price bar.
Each Stock Price bar either closes higher or lower than the previous stock trading price bar.
The highest stocks price will indicate the maximum power of the Bulls within a stock price period.
The lowest stocks price will indicate the maximum power of the Bears within a stock price period.
This Technical Indicator uses the High of the stocks price & a Moving Average (Exponential)
The moving Average represents the middle ground between sellers & buyers for a certain stock trading price period.
Therefore:
Bulls Power = High Stock Price - Exponential Moving Average
Bulls Power
Stocks Analysis and How to Generate Trading Signals
Buy Trading Signal
A buy stock signal is generated when the Bulls Power oscillator moves above Zero.
In an up stock trend, the HIGH is higher than Exponential Moving Average, so the Bulls Power is above zero and Histogram/Oscillator is located above zero line.
Exit Trading Signal
If the HIGH falls under Exponential Moving Average then it means that stocks price are starting to fall, the Bulls Power histogram fall below the zero line.
The Triple Screen method for this indicator suggests identifying the stocks price stocks 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 direction of the long term stock trend in the higher time frame.
