Elder-Ray Index

Elder-Ray Index

In technical analysis, a measure of the upward or downward pressure on a security's price. The Elder-Ray index uses two indicators: a bull power, measured as the daily high minus the exponential moving average for a certain period of time, and a bear power, measured as the daily low minus that same exponential moving average. A buy signal occurs when the bear power is negative but moving upward and the bull power has recently increased. Likewise, a sell signal occurs when the bull power is positive but moving downward and the bear power has recently fallen. One may also plot the Elder-Ray index on a chart and measure the slope of the line to confirm trends.