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Klinger Histogram and Klinger Oscillator (KO)

The sense of the Klinger Histogram is to align the Klinger Volume Oscillator reference line to zero. It was developed in conjunction with short- and long-term analysis. Klinger Oscillator is named after its inventor Stephen J. Klinger and it estimates volume-based money flow directions. Three types of information that Klinger Oscillator deals with are the range of price varying high and low, accumulation or distribution, and volume. The criteria of the movement are price range and the volume, which is a force that affects movement. When the sum of today's high, low and close exceeds the sum of the previous day it is considered as accumulation.

When the sum of the day gets lower than yesterday's one, then it appears to be a distribution. The trend maintenance is seen when both sums are at the same level. Volume shows buying and selling enforcement. It reflects prolonged price changing within the day as well. The Klinger Oscillator measures the range of the shares amount going through accumulation and distribution processes each day as “volume force." A volume force increase usually attends an uptrend. After that, it contracts progressively over the period of late uptrend stages and first downtrend phases. Volume force usually rises gradually after that and it characterizes accumulation process preceding the development of the bottom.

An oscillator shows the average that is moving exponentially in the range from 34-period and 55-period having a 13-period trigger. Volume force conversion into an oscillator helps to trace it into and out of security. The divergences existing at tops and bottoms can be found out by confronting the force to price action. The KO can be not as effective when used with the timing trades going a direction opposite to the trend as with those following the trend direction. Still, when the oscillator differs from the price action that is implied, the trend momentum may be lost and the trend can come closer to end.

The most dramatic indicator according to Klinger turns up when the difference from the implied price action and KO occurs on new highs or new lows in the area of overbought or oversold. The trend losing momentum and coming to an end can be seen when the stock reaches a new high or low and the KO does not show the same. You should buy when the Klinger Oscillator takes unusually low values below zero then goes up over the trigger line during the period of price being in an uptrend, that means price is higher than 89-day exponential moving average. You should sell when the Klinger Oscillator takes extremely high values and then goes lower through the trigger line during a downtrend that means the price, which is lower than an 89-day exponential moving average.