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How Can I Measure the Distance between Price and a Moving Average?

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Chartists can use the Percent Price Oscillator (PPO) to measure the percentage difference between price and an exponential moving average. The PPO is measures the percentage difference between two exponential moving averages. We can set the shorter EMA equal to one and this will reflect the closing price. We can then set the longer EMA to measure the distance from price (shorter EMA). The example below shows the PPO(1,200,1), which measures the percentage difference between the S&P 500 (1-period EMA) and its 200-day EMA. I set the signal line at one to hide it on this chart. The S&P 500 is currently 8.457% above its 200-day EMA.

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Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com. He has written articles for numerous financial publications including Barrons and Stocks & Commodities magazine. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed technician. In addition to his CMT designation, Arthur holds an MBA from the Cass Business School at City University in London. Learn More
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