BULLS POWER INDEX
Bulls Power is based on the difference between the maximum and 13-period exponential moving average (H - EMA). As a rule, the indicator is used in combination with a moving average or with any other trend indicator. In case of a downward movement a sell signal is produced; Bulls Power is below zero level at that moment. It is important to have a divergence of peaks in the chart in this case.
Indicator calculation technique
Exponential moving average is to be calculated the first (it is best if it is a 13-period EMA).
BU = H - EMA
BU is bulls power;
EMA is exponential moving average;
H is the highest price of the current bar.
H will be above EMA in case of a downward trend, and bulls power is above zero line, hence the histogram is located above zero line; in case of a downward trend the situation will be opposite.