Bears Power Analysis and Bears Power Signals

Created and Developed by Alexander Elder

Bears Power is used to gauge the power of the Bears (Sellers). Bears Power measures the balance of power between the bulls and bears.

This stock indicator aims at identifying if a bearish trend will continue or if the stock price has got to a point where it might & may reverse.

Calculation

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

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

The highest stock price will show the max power of the Bulls within a price period.

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

This stock indicator uses the Low of the stock price & a Moving Average (Exponential Moving Average)

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

Therefore:

Bears Power = Low Price - Exponential MA

Index Analysis and How to Generate Signals

Sell Signal

A sell stock signal is generated/derived when the oscillator crosses below Zero.

In a down-trend, the LOW is lower than Exponential MA, so the technical indicator is below zero and Histogram is located below zero line.

Exit Signal

If the LOW moves above EMA then it means that stock price are beginning to rise, the histogram rises above the zero line.

The Triple Screen method/technique for this trading indicator suggests spotting the stock price trend on a higher chart time frame interval (like daily timeframe) & applying the bears power signals on a lower chart time frame interval (like hourly timeframe). Signals are traded and transacted in accordance to the lower timeframe but only in direction of the long term trend in the higher chart time-frame.

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