If the AD volume creates a higher ratio than the AD ratio, TRIN will be below one.
If the AD volume has a lower ratio than the AD ratio, TRIN will be higher than one.
TRIN readings below one usually accompany strong price increases, as strong volume in rising stocks fuels a rally.
A TRIN value above one usually accompanies a strong price decline, as strong volume on falling assets encourages a sell-off.
The Arms Index moves opposite to the price trajectory of the Index. As discussed above, a strong price rally will cause TRIN to move to lower levels. A fall in the index will lead to an increase in TRIN.
The Accumulation/Distribution Line (A/D) measures the supply and demand of an asset or security by looking at where price closed in a period range and then multiplying that by volume.
A bull trap means a reversal that forces market participants who are on the wrong side of the price movement to close positions with unexpected losses.
A bullish engulfing pattern is a candlestick pattern that forms when a small black candlestick the next day is followed by a large white candlestick whose body completely overlaps or engulfs the body of the previous day’s candlestick.
Capitulation occurs when a significant proportion of investors give in to fear and sell within a short period of time, resulting in a sharp drop in the price of a security or market against a backdrop of high trading volume.
Consolidation is a technical analysis term used to describe the price movement of a stock within a given range of support and resistance over a period of time.
The Directional Movement Index (DMI) is a technical indicator that measures both the strength and direction of price movement and is designed to reduce false signals.