Using a Somewhat More Sensitive Rate of Change Measure of the Advance-Decline Line
The Ten-Day Rate of Change Indicator
Although the 21-day rate of change of the advance-decline line probably represents more significant changes in market momentum, the 10-day rate of change has its uses as well.
As you can see in Chart 6.6, the parameters of the 10-day rate of change tend to be somewhat narrower than the parameters of the 21-day rate of change indicator. Although readings of +/–10,000 sometimes are reached on a ten-day basis, for the most part, rates of change for that time frame tend to vary between +5,000 (overbought) and –5,000 to –8000 and even lower (oversold).
Chart 6.6. The Standard & Poor’s 500 Index Advance-Decline Line and Ten-Day ...
Get Technical Analysis: Power Tools for Active Investors now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
