Bears Power Oil Technical Analysis & Bears Power Trading Signals

Created by Alexander Elder

Bears Power is used to estimate power of the Bears (Sellers). Bears Power estimates the balance of power between the bulls & bears.

This oil indicator aims at identifying if a bearish oil trend will continue or if the crude oil price has reached a point where it might reverse.

Calculation

A Oil Price bar has 4 parameters: the Opening, Closing, High & Low of the crude trading price bar.

Each Oil Price bar either closes higher or lower than the previous crude trading price bar.

The highest crude trading price will signify and show the maximum power of the Bulls within a crude trading price period.

The lowest crude trading price will signify and show the maximum power of the Bears within a crude trading price period.

This oil technical indicator uses the Low of the crude oil price and a Moving Average (Exponential)

The moving Average represents the middle ground between sellers and buyers for a certain crude trading price period.

Therefore:

Bears Power = Low Oil Price - Exponential Moving Average

Oil Technical Analysis & How to Generate Trading Signals

Sell Crude Trading Signal

A sell oil signal is generated when the oscillator moves below Zero.

In a down oil trend, the LOW is lower than EMA, so the indicator is below zero & Histogram/Oscillator is located below zero line.

Exit Trading Signal

If the LOW moves above the EMA then it means that crude oil price are starting to rise, the histogram rises above the zero line.

The Triple Screen method for this indicator suggests identifying the crude trading price crude oil trend on a higher chart interval (like daily time frame) and applying the bears power signals on a lower chart interval (like hourly time frame). Signals are traded according to the lower time frame but only in the direction of the long term oil trend in the higher chart time frame.