Description

• It is similar to MACD oscillator with only difference is no of bars used for fast and slow line
• It uses 5/34 SMA as its parameter and difference of two is shown as value which oscillates above and below zero level
• Oscillator value can be a positive or negative

Interpretation

• EO cutting 0 levels upward is a buy signal, bullish breakout
• EO cutting 0 levels downward is a sell signal, bearish breakout

Default Parameters Used/Inputs

• Price Line

Returns/Output

EO values of stock for the specified period

Formula

EO = (SMA 5 bars – SMA 34 bars) SMA = Simple Moving Average