Bullish or bearish trend?
The Chaikin Oscillator was developed by trade expert Marc Chaikin, primarily as a trend indicator rather than price indicator.
This is because the Chaikin Oscillator is an indicator of another indicator, derived from the difference between the 3-day and 10-day Exponential Moving Average, which makes it at least twice removed from the price of the underlying security.
Interpretation of the Chaikin Oscillator
Very simply, the Chaikin Oscillator moves either above or below a zero line.
Generally, buying pressure is stronger when the indicator is in positive territory. Selling pressure is stronger when the indicator is in negative territory.
In the chart below, notice how the overall trend is ascending all the time while the Oscillator is in positive territory. Selling pressure increases when the Oscillator is in negative territory.
As with all indicators, the Chaikin Oscillator should not be used as a stand-alone indicator, but with other price oscillators such as MACD or RSI for confirmation of trends. The Chaikin Oscillator is an indicator that is available on the OSK188 trading platform.