the hAnDbook of technIcAl AnAlySISfIgure 8.13 Oscillator Chart Pattern‐Based Buy and Sell Signals on the Daily Chart
of Starbucks Corp.
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horizontally based Oscillator pattern analysis
Buy and sell signals may also be derived from applying horizontally based overlay
indicators to window oscillators. Hence, practitioners look for prior support and
resistance in the oscillators for potential bullish and bearish indications. Signals
are indicated as follows:
■ (^) Oscillator breaching a resistance level is a buy (bullish) signal
■ (^) Oscillator displaying resistance at a prior oscillator resistance level is a sell
(bearish) signal
■ (^) Oscillator breaching a support level is a sell (bearish) signal
■ (^) Oscillator displaying support at a prior oscillator support level is a buy (bull-
ish) signal
See Figure 8.14.
Oscillator‐on‐Oscillator analysis
Buy and sell signals may also be derived from the interaction between window‐
based oscillators. We have already seen an example of indicator‐on‐oscillator anal-
ysis in Figure 8.13 where the RSI reacted at the upper and lower Bollinger bands.
Similarly, oscillator‐on‐oscillator analysis may also render useful information.