Absolute Price Oscillator


The Absolute Price Oscillator displays the difference between two exponential moving averages of a security's price and is expressed as an absolute value.

Chart 1: APO

How this indicator works

  • APO crossing above zero is considered bullish, while crossing below zero is bearish.
  • A positive indicator value indicates an upward movement, while negative readings signal a downward trend.
  • Divergences form when a new high or low in price is not confirmed by the Absolute Price Oscillator (APO). A bullish divergence forms when price make a lower low, but the APO forms a higher low. This indicates less downward momentum that could foreshadow a bullish reversal. A bearish divergence forms when price makes a higher high, but the APO forms a lower high. This shows less upward momentum that could foreshadow a bearish reversal.
Chart 2: APO


APO = Shorter Period EMA – Longer Period EMA

Technical analysis focuses on market action — specifically, volume and price. Technical analysis is only one approach to analyzing stocks. When considering which stocks to buy or sell, you should use the approach that you're most comfortable with. As with all your investments, you must make your own determination as to whether an investment in any particular security or securities is right for you based on your investment objectives, risk tolerance, and financial situation. Past performance is no guarantee of future results.