Chaikin Buy/Sell Signals

Click here for an evaluation of the efficacy of the Buy Signals

At first glance, these look like the sort of signals you might find in any number of sources that address technical analysis or trading. But there is a big, and very important difference: The Chaikin Power Gauge rating, which includes not just technical considerations but also a hefty dose of fundamentals, is part of almost every signal.

The ChaikinAnalytics.com Resource Guide lists six pairs of signals, each containing a set of Buy protocols and a set of mirror-type Sell protocols.  

The six pairs are:

      1. Overbought/Oversold
      2. Momentum Breakout/Breakdown
      3. Reversal
      4. Money Flow
      5. Relative Strength
      6. Relative Strength Breakout/Breakdown

Here are details of each set of signals.

NOTE:

  • OBOS = Overbought/Oversold indicator
  • EMA = Exponentially Weighted Moving Average
  • EMA 5 of EMA 5 = 5-day Exponentially Weighted moving average of the 5-day EMA of the stock price
  • DEMA = Double Exponential Moving Average
  • MF = Money Flow
  • MFP = Money Flow Persistence (the percentage of daya in which MF was positive)
  • RS = Relative Strength

Overbought/Oversold

These suggest stocks that are ripe for trend reversals.

Oversold Buy

  • Stock closes at an 8-day low while
    • Price is (Oversold per “OBOS” Indicator (less than 30)
    • Power Gauge rating is BULLISH

Overbought Sell

  • Stock closes at an 8-day high while
    • Price is Overbought per “OBOS” Indicator (greater than 80)
  • Power Gauge rating is BEARISH

Momentum Breakout/Breakdown

These suggest stocks that have broken out of a trading band (or range) with indications that momentum in the direction of the breakthrough is likely to continue

Momentum Breakout

  • Stock crosses through its upper band while
    • Stock is outperforming (Chaikin Relative Strength is greater than 0.60)
    • Chaikn Money Flow indicator is positive (above 5), and
      • Chaikin Money Flow Persistency indicator is strong (above 50)
  • Power Gauge rating is BULLISH

Momentum Breakdown

  • Stock crosses under its lower band, or
  • Stock becomes very oversold (OBOS Crosses under 17) while
    • Stock is not outperforming (Chaikin Relative Strength is under 0.40)
    • Chaikn MF indicator is weak (below -5), and
      • Chaikin MFP is not strong (below 60)
  • Power Gauge rating is BEARISH

Reversal Buy/Sell

These are stocks that are reversing direction relative to the market with momentum in the new direction likely to continue

Reversal Buy

  • Stock crosses above its 21-day EMA while
    • Stock is not outperforming (Chaikin Relative Strength is under 0.60)
    • Chaikin MF is not very weak (above -10)
    • OBOS is not overbought (below 70) and either
      • OBOS is oversold (below 30), or
      • OBOS is rising
  • Power Gauge rating is BULLISH

Reversal Sell

  • Stock crosses under its 21-day EMA while
    • Stock is not underperforming (Chaikin Relative Strength is above 0.30)
    • Chaikin Money Flow indicator is not strong (below 10)
    • OBOS is not oversold (above 30) and either
      • OBOS is overbought (at or above 70), or
      • OBOS is falling
  • Power Gauge rating is BEARISH

Money Flow Buy/Sell

Stocks with strong or weak Money Flow (a Chaikin indicator that uses price and volume to measure flow of funds into or out of a stock) and short-term momentum that seems likely to persist

Money Flow Buy

  • Stock crosses above a rising trend defined as the 5 day EMA or the 5 day EMA (a double EMA) while
    • Stock is above its 21 day EMA
    • Chaikin MF indicator is not weak (above 5)
    • OBOS is not overbought (below 70) and either
      • OBOS is oversold (below 30), or
      • OBOS is rising
  • Power Gauge rating is BULLISH

Money Flow Sell

  • Stock crosses under its 31 day EMA while
    • Stock is below 5 day EMA of its 5 day EMA
    • Chaikin MF is weak (below 0)
    • OBOS is not oversold (at or above 30) and either
      • OBOS is not overbought (below 70), or
      • OBOS is falling
  • Power Gauge rating is BEARISH

Relative Strength Buy/Sell

Stocks outperforming or underperforming) the market with momentum trends that suggest likely continuation of that movement

Relative Strength Buy

  • Stock crosses above its 21-day EMA while
    • Stock is above 5 day EMA of its 5 day EMA
    • Chaikin Relative Strength is strong (at or above 0.60)
    • OBOS is 
      • OBOS not overbought (below 70), or
      • OBOS is rising
  • Power Gauge rating is BULLISH or NEUTRAL

Relative Strength Sell

  • Stock crosses under its 21-day EMA while
    • Stock is below 5 day EMA of its 5 day EMA
    • Chaikin Relative Strength is weak (at or below 0.30)
    • OBOS is 
      • OBOS not oversold (above 30), or
      • OBOS is falling
  • Power Gauge rating is BEARISH or NEUTRAL

Relative Strength Breakout/Breakdown

Strong (or weak) stocks that further strengthened (or weakened) to outperform (or underperform) the market

Relative Strength Breakout

  • Chaikin RS crosses over 0.60 while
  • Power Gauge rating is BULLISH, or
    • Stock is above its DEMA, and
    • OBOS is not overbought (below 70)

Relative Strength Breakdown

  • Chaikin RS crosses under 0.30 while
  • Power Gauge rating is BEARISH , and Chaikin MF is below 20, or
    • Stock is below its DEMA, and
    • OBOS is not oversold (above 70)