The Haurlan Index is an overbought and oversold indicator. It was developed in the 1960s by Peter N. Haurlan. It has three components: short term, intermediate term, and long term.
A 3-day EMA is taken of the net NYSE advances over declines, measuring the short-term condition of the market. If this index exceeds +100, it generates a market short-term buy signal. When the market drops below -150, the signal stops to be in effect. When the index moves above +100, the sell signal is not in effect anymore.
Intermediate Term is considered the most important of the three indexes. It is the same as short term but it has a 20-day exponential moving average. Market buys and sells are determined in this index by the crossing of trend lines or support/resistance levels depending on the particular market in question. For example, a resistance level may be set up when the market is basing out in preparation for an uptrend. Once its value is defined, it generates buy and sell signals.
Long Term is useful for determining trends but not for signals. It is the same as intermediate term except for a 200-day exponential moving average. The intermediate component is necessary to corroborate breaks of resistance and support. After it was confirmed, buy and sell signals are generated. To determine the primary trend in price, the long-term component is used.