As market men struggle to decide whether to sell at 5750 levels in the Nifty future or buy around these levels, here is one indicator which diminishes the immediate prospect of a down move from these levels on Monday.
It’s called the McClellan Oscillator.Developed by Sherman and Marian McClellan, the McClellan Oscillator is a breadth indicator derived from Net Advances, the number of advancing issues less the number of declining issues. Subtracting the 39-day exponential moving average of Net Advances from the 19-day exponential moving average of Net Advances forms the oscillator.
I should first thank Moh before putting this chart up as he advanced this chart to Viren who forwarded it to me. Thank you Moh.
The blue line in the charts is the Nifty spot and the brown shaded region is the indicator reading. The oscillator operates in a -80 to +80 region which are in itself extreme readings.
At -110 after yesterday’s close, it has registered the most extreme reading in 5 months and is calling for a pull back.
