Range Expansion Index™

The Range Expansion Index (REI™) identifies areas of price exhaustion generally associated with price peaks and troughs. This indicator is selective in the sense that it compares current price activity with recent price movement, but it ignores breakaway price moves until its steepness begins to dissipate. For better results, if the number of bars outside the band is 5 or fewer, a potential top or bottom has been formed. Generally. this is confirmed once a down/up close versus the previous day's bar is recorded.

For further information on Range Expansion Indicator, please refer to Thomas R. DeMark, The New Science of Technical Analysis, New York: John Wiley & Sons, 1994, Chapter 3, Overbought/Oversold.

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