Developed by Larry Williams, the Ultimate Oscillator is a combination of three oscillators based on three time spans. The formulation is too complex to describe fully in this short course, however, the author's rules for usage are quite concise...
Williams suggests the following regarding buy and sell signals...
1. Buy on positive divergence where the low of the oscillator has dipped below 30.
2. Sell on negative divergence where the high has exceeded 50.
3. Close long positions when the oscillator exceeds 70.
4. Close short positions when the oscillator goes below 30.
Daily bar chart of Coca Cola. Note the strong buy signal in late September.
Created using Analyst from Trendsetter Software.
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