Percentage Price Oscillator - PPO

A technical momentum indicator showing the relationship between two moving averages. To calculate the PPO, subtract the 26-day exponential moving average (EMA) from the nine-day EMA, and then divide this difference by the 26-day EMA. The end result is a percentage that tells the trader where the short-term average is relative to the longer-term average.

Investopedia Commentary

The PPO and the moving average convergence divergence (MACD) are both momentum indicators that measure the difference between the 26-day and the nine-day exponential moving averages. The main difference between these indicators is that the MACD reports the simple difference between the exponential moving averages, whereas the PPO expresses this difference as a percentage. This allows a trader to use the PPO indicator to compare stocks with different prices more easily. For example, regardless of the stock's price, a PPO result of 10 means the short-term average is 10% above the long-term average.

Related Links

Getting to Know Oscillators - Part 1: Introduction
Getting to Know Oscillators - Part 4: Momentum
Moving Average Convergence Divergence - Part 1
Moving Average Convergence Divergence - Part 2
Introduction To Technical Analysis

See also: Exponential Moving Average - EMA, Indicator, Momentum, Moving Average, Moving Average Convergence Divergence - MACD, Technical Anaysis

Also spelled: PPO