Developed by Tushar Chande in 1995, the Aroon is an indicator system that can be used to determine whether a stock is trending or not and how strong the trend is. "Aroon" means "Dawn's Early Light" in Sanskrit and Chande choose that name for this indicator since it is designed to reveal the beginning of a new trend.
The Aroon indicator consists of two lines, Aroon(up) and Aroon(down). The Aroon Oscillator is a single line that is defined as the difference between Aroon(up) and Aroon(down). All three take a single parameter which is the number of time periods to use in the calculation. Since Aroon(up) and Aroon(down) both oscillate between 0 and +100, the Aroon Oscillator ranges from -100 to +100 with zero serving as the crossover line.
Aroon(up) for a given time period is calculated by determining how much time (on a percentage basis) elapsed between the start of the time period and the point at which the highest closing price during that time period occurred. When the stock is setting new highs for the time period, Aroon(up) will be 100. If the stock has moved lower every day during the time period, Aroon(up) will be zero. Aroon(down) is calculated in just the opposite manner, looking for new lows instead of new highs.
GT::Indicators::AROON->new()
GT::Indicators::AROON->new([20])
This indicators is validated by the values from comdirect.de. The stock used was the DAX (data from yahoo) at the 04.06.2003:
AroonUp[25] [2003-06-04] = 100.0000 (comdirect: 100.0) AroonDown[25] [2003-06-04] = 76.0000 (comdirect: 76.0) AroonOsc[25] [2003-06-04] = 24.0000 (comdirect: 24.0)
http://stockcharts.com/education/resources/glossary/aroon.html http://www.paritech.com/education/technical/indicators/trend/aroon.asp http://www.geocities.com/WallStreet/Floor/1035/aroon.htm