Business, Legal & Accounting Glossary
The Chaikin Oscillator is a volume indicator based upon a moving average of the Accumulation/Distribution Line (ADL).
The Chaikin Oscillator is created by subtracting one exponential moving average of the Accumulation/Distribution Line (e.g. 10-day average) from another EMA of the same line (e.g. 3-day average). The result is plotted on the chart.
The usefulness of the oscillator is in determining whether there is a divergence between the direction of the stock price and the oscillator or whether the oscillator confirms the price movement.
Long positions are opened when bullish divergence occurs while short positions are opened when bearish divergence occurs.
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This glossary post was last updated: 23rd March, 2020 | 1 Views.