The Aroon indicator consists of two lines, 'Aroon(up)' and 'Aroon(down)'. It uses a single parameter, which is the number of time periods to use in the calculation. Aroon(up) measures the amount of time (on a percentage basis) that has elapsed between the start of the time period and the point at which the highest price occurred. If the stock just closed at a new high for the given period, Aroon(up) will be +100. For each subsequent period that passes without another new high, Aroon(up) moves down by an amount equal to (1 / # of periods) x 100. The Aroon(down) line uses a likewise calculation, measuring new lows over the given time period.

A separate indicator called the Aroon Oscillator can be constructed by subtracting Aroon(down) from Aroon(up). Since Aroon(up) and Aroon(down) oscillate between 0 and +100, the Aroon Oscillator will oscillate between -100 and +100, with zero as the center crossover line. A sudden cross above 50 often indicates the beginning of a strong uptrend.

Average True Range (ATR) - Developed by J. Welles Wilder, ATR is an indicator that measures a security's volatility. High ATR values indicate high volatility and may be an indication of panic selling or panic buying. Low ATR readings indicate less volatile, sometimes sideways movement of the stock.

The True Range indicator is the greatest of the following:

-current high less the current low.
-the absolute value of the current high less the previous close.
-the absolute value of the current low less the previous close.

The Average True Range (ATR) is a moving average (generally 10 to 20 days) of the True Ranges.

Bollinger Bands - Designed by John Bollinger in the early 1980's, Bollinger Bands are statistical measures of relative highs and lows for a stock. By definition, prices are high at the upper band and low at the lower band. This definition can aid in pattern recognition, and is useful in comparing price action to the action of indicators to arrive at systematic trading decisions.

Bollinger Bands consist of a set of three curves drawn in relation to the stock price. The middle band is a measure of the intermediate-term trend, usually a simple moving average, that serves as the base for the upper and lower bands. By using a designated number of standard deviations from this moving average, an envelope is created around the price of the stock, suggesting possible price points of resistance. Popular interpretations of the Bollinger Bands involve current prices that are touching or moving along a particular band. Additionally, converging or diverging bands may indicate compression or decompression with the stock price. Compressing bands are an indication of a possible upcoming breakout in either direction.

The standard deviation parameter is used to control how far the upper and lower bands are positioned from the center moving average line. Typically the value of the moving average period is 20, and standard deviation parameter used is 2, indicating that the extreme high or low for the stock is 2 standard deviations from the 20 day moving average.

The use of Bollinger Bands varies greatly among traders. Some traders buy when the price touches the lower Bollinger Band and exit when price touches the moving average in the center of the bands. Others buy when price breaks above the upper Bollinger Band, or sell when price falls below the lower Bollinger Band. The use of Bollinger Bands is not confined to stock traders. Options traders - most notably implied volatility traders - often sell options when Bollinger Bands are historically far apart, or buy options when the Bollinger Bands are historically close together, in both instances expecting volatility to revert back toward the average historical volatility level for the stock.

Bullish Percent Index (BPI) - A market breadth indicator that is calculated by dividing the number of stocks in a given group (an exchange, an industry, etc.) that are currently bullish, using Point and Figure charts, by the total number of stocks in that group. Bullish Percent levels that are near or above 70% are generally considered overbought. Levels near or below 30% are generally considered oversold. Strong buy signals occur when the Bullish Percent Index falls below 30% and then reverses up by at least 6%. Conversely, promising sell signals occur when the BPI rises above 70%, then reverses down by at least 6%.

It is important to note that the Bullish Percent Index is not something that can be applied to a single stock, but rather an index that is calculated for a group of stocks.

CCI (Commodity Channel Index) - An oscillator used in technical analysis to help determine whether a stock is overbought or oversold. The Commodity Channel Index, first developed by Donald Lambert, quantifies the relationship between the asset's price, a moving average (MA) of the asset's price, and normal deviations (D) from that average. It is computed with the following formula:

CCI = (Price - MA) / (0.015 x D)

The CCI, when used in conjunction with other oscillators, can be a valuable tool to identify potential peaks and valleys in the stock's price. A moving average value such as 14 or 20 days often detects trend reversals earlier than other indicators. A 50 day moving average, or CCI(50), can be used to determine the medium-term trend of a stock.

DMI (Directional Movement Index) - Also known as the ADX Indicator. The DMI/ADX was developed by J. Welles Wilder, and is a trend following system. The average directional movement index, or ADX, determines the market trend. When used with the up and down directional indicator values, +DI and -DI, the DMI is an exact trading system.

The standard use of the DMI/ADX is to establish a long position whenever the +DI crosses above the -DI. Reverse your position and establish a short position when the -DI crosses above the +DI.

For some traders, the most significant use of the ADX is to measure the strength of the current trend, and to detect turning points. ADX values above 25 indicate a strong trend. When the ADX turns lower, the market often reverses the current trend. The ADX serves as a warning for a market about to change direction.

According to the developer of the DMI, you should stop using any trend following system when the ADX is below both DI lines. The market is in a choppy sidewise range with no discernible trend.

RSI (Relative Strength Index) - A technical analysis indicator which measures the magnitude of gains over a given time period against the magnitude of losses over that period. The equation is RSI = 100 - 100 / (1 + RS) where RS = (total gains / n) / (total losses / n) and n = number of RSI periods. The value can range from 1 to 100. A value of 30 or below indicates an oversold condition, and a value of 70 or above indicates an overbought condition.

Adjusting the time period of the RSI affects its use. Use RSI(14) to determine if the stock is in a medium term uptrend or downtrend. Use a shorter time frame, such as RSI(5), to signal entry or exit points.