The OsMA Technical Analysis Tool
Posted by Edward Dy on July 8th, 2008
Photo credit financeninja
The Oscillator-Moving Average or OsMA is an expression of a function of Oscillator utilized in technical analysis.
The oscillator as an indicator permits the demonstration of the relationship between any two given set periods of the Moving Average. This moving average can be represented as a percentage or number. The oscillator comes in two forms: the price oscillator and the volume oscillator.
The Oscillator permits the discovery of short-term conditions, which may be oversold or overbought, and is therefore a useful trend indicator. When the oscillator’ value starts to approach the higher extreme levels, the asset then can be treated as overbought. Conversely, when it approaches the lower extremes, it is treated as oversell.
OsMA, then demonstrates clearly the variance of the oscillator from its moving average. In this case then, the MACD’s main line will serve as the oscillator, and the MACD’s signal becomes the moving average.