What Does It Mean?
Derived from Projection Bands, the Projection Oscillator (developed by M. Widner) measures the distance of the closing value within the current Projection Bands.
When the close is near or approaching 0, that translates to a close which is near the lower projection band. A value near or approaching 100 indicates the close is approaching the upper projection band.
Projection Oscillator Combined with Bar Chart
Overbought/Oversold:
Buy when the oscillator falls below a specific level (e.g., 20) and then rises above that level, and sell when the Oscillator rises above a specific level (e.g., 80) and then falls below that level.
Crossovers:
Buy when the oscillator crosses above its trigger (dotted) line and sell when the oscillator crosses below its trigger line.
Divergences:
You may consider selling if prices are making a series of new highs and the oscillator is failing to surpass its previous highs, or, you may consider buying if prices are making a series of new lows and the oscillator is failing to surpass its previous low.
