The
Haurlan Index was developed by Peter N. Haurlan in the 1960s as an overbought / oversold indicator. It is made up of three components - short term, intermediate term, and long term.
The short term component is a 3 day exponential moving average of the net difference between the number of advancing issues and the number of declining issues.
The intermediate term component is a 20 day exponential moving average of the net difference between the number of advancing issues and the number of declining issues.
The long term component is a 200 day exponential moving average of the net difference between the number of advancing issues and the number of declining issues.
When the short term component moves above +100 a short term buy signal is generated. It remains in effect until the short term component moves down to -150. At -150 a short term sell signal is reached. Stay short until the indicator reaches +100.
The intermediate component is used to confirm breaks of support and resistance. With confirmation, buy and sell signals are generated.
The long term component is used to determine the primary trend in price.
