Name, Sometimes Called:
Chaikin Oscillator
Also called Chaikin Accumulation/Distribution Oscillator or Chaikin
A/D Oscillator
Do not confuse this TAI with the Chaikin
Money Flow Oscillator.
Brief Description:
The Chaikin Oscillator is based on the Accumulation-Distribution
Line, upon which it depends. Hence it is an indicator of an
indicator.
Definitions, Formulas:
The Chaikin Oscillator is calculated by subtracting
a 10-day exponential moving average (EMA)
of the Accumulation-Distribution Line from a 3-day EMA of the AD-L.
Any time period can be used for which the A-D line data (volume,
high, low, and closing price) are available. Refer to the A-D
Line TAI.
Begin by calculating the A-D Line for the selected period. Refer
to the A-D Line TAI. The Chaikin
Oscillator (CA-DO) is then calculated as
CA-DO = EMA(3)(AD-Line) - EMA(10)(AD-Line)
Positive Development Calculation:
For this TAI, a new positive development (NPD)
occurs when CA-DO x+ 0. That is, when the CA-DO line crosses above
zero.
This TAI is no longer positive when the CA-DO line crosses below
zero: when CA-DO x- 0.
If this TAI is still positive tomorrow, it will no longer be new,
but will be a cumulative positive development (CPD).
If this TAI was a new positive development (NPD)
yesterday, and is still positive today, then it becomes a cumulative
positive development (CPD).
History:
Marc Chaikin (177 E. 77th St., New York, NY 10021)
developed this indicator, which bears his name. It is based on the
Accumulation/Distribution Line, which
in turn can be viewed as an elaboration of Joseph Granville’s
and Larry Williams’ earlier work on the On
Balance Volume indicator.
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