Percentage Price Oscillator or PPO
Percentage price oscillator (PPO) is a stock market indicator used to figure out the relationship between long-term and short-term trends. Percentage price oscillator gives the percentage difference between long-term exponential moving average (usually 26 day EMA) and short-term exponential moving average (usually 9 day EMA). The formula for PPO is,
PPO = (short-term EMA – long-term EMA) / long-term EMA
Results are integers, both positive and negative, which can be plotted on either side of a center line Zero. Positive values mean short-term average is above long-term average and negative values mean short-term average is below long-term average. Usually buy signals are issued when PPO values are above zero and sell signals are issued when PPO values are below zero.
Percentage price oscillator offer many advantages over Absolute price oscillator (APO), including better representation, easy to compare price oscillation of different stocks regardless of their price and easy to compare EMAs over time. PPO is very similar to Moving Average Convergence Divergence (MACD), but as it presence percentage difference it is easy to follow and understand. Like MACD-Histogram, PPO-Histograms are also used to figure out the result between PPO and short-term EMA of PPO.
PPO = (short-term EMA – long-term EMA) / long-term EMA
Results are integers, both positive and negative, which can be plotted on either side of a center line Zero. Positive values mean short-term average is above long-term average and negative values mean short-term average is below long-term average. Usually buy signals are issued when PPO values are above zero and sell signals are issued when PPO values are below zero.
Percentage price oscillator offer many advantages over Absolute price oscillator (APO), including better representation, easy to compare price oscillation of different stocks regardless of their price and easy to compare EMAs over time. PPO is very similar to Moving Average Convergence Divergence (MACD), but as it presence percentage difference it is easy to follow and understand. Like MACD-Histogram, PPO-Histograms are also used to figure out the result between PPO and short-term EMA of PPO.
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posted by Daniel Pipitone at
6:25 PM
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