The Handbook of Technical Analysis + Test Bank_ The Practitioner\'s Comprehensive Guide to Technical Analysis ( PDFDrive )

THE HAnDbook of TECHnICAl AnAlysIs

price‐oscillator agreements

Market practitioners also look to agreements between price and oscillator action as
a tentative confirmation of current market view. There are six basic ways of reading
oscillator action, previously covered in more detail in Chapter 8, which are:

1. Overbought/oversold levels


2. Central Value Crossovers (also referred to as the zero line for unbounded os-
   cillators and as the 50 percent level for bounded oscillators)


3. Signal line crossovers


4. Divergence between oscillator action and price action

fIgure 27.34 Price‐Time Confluence on the Four‐Hour EURUSD Chart.
Source: MetaTrader 4

fIgure 27.35 Price‐Time Confluence on the Daily U.S. Dollar Index Chart.
Courtesy of Stockcharts.com