STIX indicator is the short-term index measuring the portion of the advancing stocks in the total number of the stocks listed in a market index. The STIX indicator is used in technical analysis to reveal overbought and oversold level on the market (when applied to Exchanges) and market sectors (when applied to market indexes).
The STIX (Short Term Index) was first time mentioned by Picton Davies in his "The Polymetric Report Stix Record Book" in 1985. It is based on comparison of the number of advancing and declining stocks.
Traditionally, STIX based on the Exponential Moving Average with 21-bar period setting applied to the advance decline issues ratio and it oscillates in the range from 0 to 100. On our index charts you may have custom EMA applied to the Advance/decline ratio.
Technical Analysis, Signals and Trading Systems
In technical analysis the STIX index is used to determine the overbought and oversold condition on Exchanges and on market sectors covered by indexes. According to the "Polymetric Report" when EMA with 21-bar period setting is used
- Most of the time the STIX indicator moves in the rage between 42 and 58;
- When the STIX indicator drops below 42 level it could be an indication of oversold market and it could be used as a signal to buy (except it is ranging Bear Market);
- The market is considered overbought when the STIX indicator raises above 56 (unless it is a new Bull Market);
- The market is considered strongly overbought and a "Sell" signal could be generated when the STIX indicator moves above 58 level (again, unless it is a new Bull Market).
|Overbought / Oversold Condition||STIX(21) Values|
|Extremely Overbought||greater than 58|
|Fairly Overbought||greater than 56|
|Fairly Oversold||less than 45|
|Extremely Oversold||less than 42|
Comments by JustSignals
At the close, Thursday July 26,2018, the STIX was "56.2"
Keep following JustSignals using Twitter, @StockTwits or Follow By Email. Just submit your email address in the box on the Blog homepage.
This has been posted for Educational Purposes Only.
Do your own work and consult with Professionals before making any investment decisions.
Past performance is not indicative of future results.