Category: Money tips Release Date: 2006-08-19
Overbought oversold line and Teng down Index trend analysis as part of a technical analysis indicator, its main purpose the analysis of the general trend up or down with the momentum, so that the potential trend of the stock market clearly demonstrated. It is the use of statistical theory to measure the stock market momentum approach to a simple stock Change information as a basis for calculation.
The information needed to establish OBOS is that each trading day up and down the number of stock companies, the selection of parameters of its cycle, generally 10 days for a cycle, its formula is as follows:
OBOS = N Number of days after moving up the sum of-N Number of days after moving down the sum of
OBOS The figures can also be positive as negative, an indication that market are long or short the market, OBOS when the value is positive, the stock bull market belongs to, OBOS when the value is negative, the stock market fall short.
As OBOS with mobile characteristics, they are able to eliminate the interference of some uncertain factors, and the current direction of market forces, obviously realizing that vision.
If the investor to be used to analyze the trend OBOS lines, and often must be compatible with the weighted index daily chart, to a comprehensive analysis of judgments, determining the method is as follows:
â’?If the weighted index continued upwards, while the OBOS lines go down, such a departure from the phenomenon, which means that most of the small-cap stocks have gone soft, so the market will tend to be weak.
â’?If OBOS lines keep on rising and rising stock on behalf of companies with more than decliners, while the weighted index was down the slide at this time that the market will soon reverse upwards.
These two judgments above method seems to ignore the influence of broader market blue-chip stocks, does not. OBOS lines calculated from the data analysis is the decision on behalf of investors. Most investors decide to buy, the majority of the stock will rise, this situation persists, OBOS line will show up trends.
The other must be noted that, OBOS line movements are random movement style, and trends in context does not matter we can find, so when using this indicator can not be any deliberate attempts to trends. There are in this category indicators in the analysis of trend indicators on individual stocks is invalid.
