When we are looking for a stock to invest in, we are interested in a change of trend. The stock may have been going sideways for a while before starting an upward trend. When the stock goes sideways, neither the bullish or bearish signals dominate. We will see an indicator bearish one day and bullish the next. As we have nine indicators in the detailed analysis, this means that for a sideways moving stock, we will see around 4 or five bullish signals in a single day. Only when a new upward trend starts, do we see the bullish signals dominate and our screen turn green.

Our detailed analysis screen normally shows us the last 20 trading days when it opens up. If the stock has been trading in a sideways pattern for that time, we will have approximately the same number of bullish and bearish indicators. There are 180 indicator squares showing, 9 for each day times 20 days. So if we give the value of 1 to a bullish square and a value of -1 to a bearish signal and count them all up, we would expect a figure close to 0 for sideways moving stocks. The bull and bear signals neutralise each other.

But what happens when a stock enters a new upwards trend? The indicators quickly change to bullish and the screen quickly turns green. So what happens to the net count of bullish and bearish signals at this time? The more bullish squares we have, the higher our net count. So as the trend continues, our net signal count will also go up.

Take the example below.

The MACD is negative and nothing is happening to draw our attention to this stock at this time. The detailed analysis also shows around 4 or 5 bearish signal each day, giving us a fairly even red and green screen.

A few days later this significantly changed. The price starting moving up, the MACD went positive and we started to get a very bullish daily picture in our detailed analysis.

For the next two weeks we can only see one bearish signal and the price rose around 50% in that time.

If we go back to our net count , we can see in the right hand column it was 60 and then rose to over 130 around 2 weeks later.

Now picture in your mind a ladder. Our analyser has 180 bullish signal cells. At the extreme, a very bullish stock will have a count of 180 while a very bearish stock will have a count of -180. Split the 180 down into steps on our ladder equal to 12 for each rung. We can climb up the ladder in an uptrend or we can climb down the ladder in a down trend. Our first rung is 0 to 12, our second rung is 13 to 24 and so on. If we get enough bullish signals, we can go to the next rung on the ladder. This gives a bullish signal for today.