Oscillators lead a price move
Oscillators are leading indicators as they lead a price move. They move above and below a centerline (center oscillators) or banded (banded oscillators) between two extreme values. The banded oscillators are designed for discovering short-term overbought or oversold conditions. As the value of the oscillator approaches the upper extreme band the stock market is deemed to be overbought, and as it approaches the lower extreme it is deemed to be oversold.
Those points could be used by investors for entering into an existing trend or for profit taking. Center oscillators like the Modified Moving Average Convergence Divergence (Modified MACD) fluctuated above and below a predefined line, measuring the strengths/momentum of the underlying security. Centered oscillators are used to identify the strength of the underlying security or the direction of momentum behind a move and therefore they could also act as trend indicators.
WallStreetCourier.com offers the following oscillators:
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