Mcclellan Oscillator

Posted in Finance, Accounting and Economics Terms, Total Reads: 661

Definition: Mcclellan Oscillator

Mcclellan oscillator is a market breadth indicator that is based on the advance decline data and indicates overbought and oversold conditions of the market. Stocks are traded everyday and some closes higher (advances) while the other may close lower (decline). The gap between advances and declines is known as the daily breadth. Daily Advance-Decline Line is the running cumulative total of daily breadth. The indicator is used in technical analysis of the New York stock Exchange (NYSE) to evaluate the rate of money leaving and entering the market.

Developed by Sherman and Marian McClellan in 1969, the indicator could be applied to portfolio of stocks, stock market exchanges, indexes, or any basket of stocks.

In order to calculate the oscillator,

Oscillator= (19 day EMA of advances - declines) - (39 day EMA of advances - declines)

If the oscillator is positive, i.e. when shorter moving average is above the longer moving average, it means advances are dominating the declines. It gives another way to quantify the market rather than just looking at the price indices. It may also hints towards start of extended move by the breadth thrusts.


Hence, this concludes the definition of Mcclellan Oscillator along with its overview.

Browse the definition and meaning of more terms similar to Mcclellan Oscillator. The Management Dictionary covers over 7000 business concepts from 6 categories.

Search & Explore : Management Dictionary

Share this Page on:
Facebook ShareTweetShare on G+Share on Linkedin