Bulls Power Stock Analysis & Bulls Power Trading Signals

Developed by Alexander Elder

Bulls Power is used to gauge the power of the Bulls (Buyers). Bulls Power estimates the balance of power between the bulls & bears.

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

Calculation

A Price bar has four parameters: the Opening, Closing, High & Low of the price bar.

Each Price bar either closes higher or lower than the previous price bar.

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

The lowest price will indicate the maximum power of the Bears within a price period.

This Indicator uses the High of the price & a MA (Exponential MA)

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

Therefore:

Bulls Power = High Price - Exponential Moving Average

Bulls Power

Stocks Analysis and How to Generate Trading Signals

Buy Trade Signal

A buy signal is generated when the Bulls Power oscillator moves above Zero.

In an up trend, the HIGH is higher than Exponential Moving Average, so the Bulls Power is above zero and Histogram Oscillator is located above the zero-line.

Exit Trade Signal

If the HIGH falls under Exponential Moving Average then it means that price are starting to fall, the Bulls Power histogram dropfallsdrops below the zero-line.

The Triple Screen method for this indicator suggests identifying the price trend on a higher chart interval (like daily time frame) and applying the bulls power on a lower chart interval (like hourly chart time-frame). trading Signals are traded according to the indicator but only in direction of the long term trend in the higher time frame.