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| Added: June 12, 2007 |
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MetaStock, indicator
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The Close Location Value (CLV) is one of the indicators using the location of
Close related to Low and High for the same period. It is, therefore, trying to
spot the tendency in the price move of the security.
When the CLV and a stock price form a positive (negative) divergence, we consider
it a bullish (bearish) signal.
When the CLV is crossing zero line. Positive CLV is considered bullish and vice
versa.
The CLV is based on the daily price action, and therefore it is ignoring overnight
gaps. Consider the stock falling dramatically overnight, and then regaining part
of its value next day. The CLV will actually jump UP, as the "next day"
price action is very bullish and the gap is not even considered by the indicator.
To avoid this trap, keep an eye open for gaps, and do not rely on fast moves -
to detect the divergence with confidence, allow it some time (2+ months) to mature.
Formula:
The Close Location Value indicator is calculated like:
Code:
Close Location Value
((CLOSE - LOW) - (HIGH - CLOSE)) / (HIGH - LOW)
Close Location Value ((CLOSE - LOW) - (HIGH - CLOSE)) / (HIGH - LOW)
Source: http://www.fongan.net
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