Detrended Price OscillatorThe Detrended Price Oscillator (DPO) was described by Steve Achelis in his book “Technical Analysis from A to Z ”. It attempts eliminate the long term trend and find immediate overbought and oversold areas in price. The formula looks like this DPO = Close – (Moving Average “(N/2 + 1)” Days Ago)By detrending price it is suppose to be easier to determine short term overbought and oversold areas in a given security. When the Detrended Price Oscillator is above 0 it is said to be overbought. When it is below 0 it is said to be oversold. The buy signal is produced when the oscillator moves above 0. The sell signal comes when the oscillator moves below 0. Below is an example of how the indicator appears on a chart. 
Tip Professionals will consider a break above $0 a buy point and will use it alongside other indicators to tell where a stock is likely to go in the near future. Other Oscillators There are numerous oscillators out there which you can use to determine if a given security is overbought or oversold. Here is a small list of some important indicators that you can look into. Money Flow - This looks at the highs and lows of a stock in order to determine where the stock is likely to move in the near future Accumulative Swing Index - This index has been said to show the longer term trends within a given stock RSI - This looks at the trend of a stock and tries to determine where the momentum is moving it |
