Klinger Oscillator: What Is It & How To Read Klinger Oscillator

Stephen Klinger created the Klinger oscillator to establish the long-term trend of money flow while staying sensitive enough to detect short-term changes. The indicator analyzes the volume moving through stocks to the price fluctuations of the assets and then translates the result into an oscillator. The Klinger oscillator displays the distinction between two moving averages that are not only based on price but also other factors. Traders look for divergence on the indicator to indicate possible price reversals. A signal line, like other oscillators, can be added to offer extra trading signals.

Trendlines, moving averages, and other indicators will be used by traders to confirm trading recommendations. Traders may also use the Klinger oscillator in conjunction with chart patterns like price channels or triangles to confirm a breakout or breakdown. Because crossovers and divergences occur often, the indicator is best utilized in conjunction with these other technical trading approaches. Here is how to read Klinger oscillator regarding uptrends and downtrends.

How to Know an Uptrend via Klinger Oscillator

When an asset is in an overall uptrend like if it is above its 100-period moving average and the Klinger oscillator is above zero or going above zero, traders can purchase when the Klinger volume oscillator goes over the signal line from below. Klinger observes that when a stock is in an uptrend and then sinks to extremely low levels below zero before rising above its signal line, this is a suitable long position to consider.

Considering the Downtrend Through Klinger Oscillator

When an asset is in a downtrend, traders may sell or short when the Klinger oscillator falls below the signal line from above. Klinger highlights that this is especially striking given the indicator’s very high rise above zero. Some traders use the zero line to signify the shift from an uptrend to a downtrend, or vice versa. While such indications may not always correspond to price fluctuations, a rise above zero helps confirm a rising price, while a move below zero helps confirm a dropping price.

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