Ultimate Oscillator

This is not different with others except that it combines three time frames during its oscillation. Like other, this too has a range from 0 to 100 in its values with 50 as centre line. When oscillator is below 30, stock is said to be in oversold and when indicator is above 70, overbought phase is said to occur.

This oscillator can be used with intraday, short, mid or long term as its mixture of three different time frames. Only thing to remember is that, it is not that the security starts moving up if it reaches oversold in this indicator. It is only confirmed when the oscillator starts moving up again, particularly above 50 region. As well, selling to be done once the oscillator line comes below 50.

Applications of ultimate Oscillator

Divergence

Even this application doesn’t really differ with others. When the stock makes new high and oscillator descending in its way, it’s a sign for coming downfall. Here, sell the scrip only below 50.

If the scrip closing prices fall by making new low without its corresponding indicator line making the same low, then it’s said that, stock may look at reversal trend. Buy the stock once it crosses the center line, 50.