PERCENTAGE PRICE OSCILLATOR (PPO)

  
Percentage Price Oscillators (PPO) is derive by subtracting Longer moving average from the smaller moving average and then dividing by longer moving average.

The Percentage Price Oscillators (PPO) is almost identical to the MACD.

Description :

The Percentage Price Oscillators (PPO) is represents two moving averages relative to each others. It’s generates buy signals when shorter term moving average cross above longer term moving average.

The Percentage Price Oscillators (PPO) Histogram shows the difference between the Percentage Price Oscillators (PPO) and 9-days EMA (exponential moving average) of the PPO. Increases in the Percentage Price Oscillators (PPO) histogram represents  the bullish momentum is strengthening and  declines in Percentage Price Oscillators (PPO) Histogram represents bearish momentum is strengthening.  All crossover above or below the center line indicates shorter moving average crossing above or below the longer moving average and that’s a buy or sell signal..

How to Calculate?

 {[ ( Shorter Moving Avg ) – ( Longer Moving Avg ) ]/ (Shorter Moving Avg)}*100





Divergence in the Percentage Price Oscillators (PPO):

A lower peak in the Percentage Price Oscillators (PPO) against higher highs in the stock market called negative divergence and typically it's a Sell signal.
A higher peak in the Percentage Price Oscillators (PPO) against lower lows in the stock market called positive divergence and typically it's a Buy signal.

To get good result with Percentage Price Oscillators (PPO) we need to use it with other technical indicators like Moving Average (MA) | On Balance Volume (OBV) | Price Rate Of Change (ROC) | Relative Strength Index (RSI) | Stochastic Oscillator (STO) | Commodity Channel Index (CCI) | Chaikin Money Flow oscillator (CMF). When we use two or three technical indicators and in case of positive divergence and negative divergence it giving real good result, only you need to change time span and find out which is a better pair for you.