Accelerator Oscillator (AC)
A technical analysis indicator developed by Dr Bill Williams. It measures the acceleration/deceleration of the current momentum. Before a price reversal, there is a change in momentum preceded by a deceleration of the current momentum until it comes to zero and starts accelerating in the opposite direction. It is calculated as follows: AC = AO-SMA (AO, 5)
A Buy signal is generated when AC is above zero and two green bars follow a red bar. If AC is below zero, then three green bars are required. Similarly, a Sell signal is generated when AC is below zero and two red bars follow a green bar. If AC is above zero, then 3 red bars are required.