The Price Oscillator indicator shows the variation among two moving averages for the price of a security. Unlike the MACD which always uses 12- and 26-day moving averages and always expresses the difference in points, the Price Oscillator can show the variation between any moving averages and can be shown in either percentages or points.
Moving average analysis typically generates buy signals when a short-term moving average or price rises above a longer-term moving average. Sell signals are generated when a shorter-term moving average or price falls below a longer-term moving average. The Price Oscillator's single line illustrates the cyclical and often profitable signals generated by a two moving average system. Buy when the Price Oscillator rises above zero and sell when the indicator falls below zero.