Coppock

Type

Bull market Indicator

History

Developed by Edwin Coppock with one sole purpose: to identify the commencement of bull markets. The indicator was devised for use on the Dow Jones Industrial Average but is suitable for use on other market indices or averages

How does it work?

The Coppock indicator was devised to identify the commencement of bull markets. Although often late, the Coppock indicator can provide very reliable signals.

A bull market is signalled when the Coppock turns up from below zero. At this point Coppock advised on buying a diversified portfolio of the strongest stocks relative to the market over recent months. This is due to the fact that the Coppock is telling us that the market has already bottomed out and the bull- run has begun. The strongest stocks tend to be the leaders of the coming bull market.

Trading Signals

The Coppock is only useful for identifying the start of a bull trend, and does not provide any exit signals. A bull market is signalled when the Coppock Indicator turns up from below zero

Settings

 ShareChart:

Sharechart Default:  10 period - 11 period, 14 period

Example

TAB Limited in mid October, as illustrated with the Coppock Indicator, began a bull run when the Coppock turned up from below zero. The price ran from approx $3.50 to over $4.00 a profit increase of over 14% in under 3 weeks, with possibility of further gains with a UniTab Ltd and Tabcorp Holdings merger war on the cards.

The setting for the Coppock indicator for the graph above was 10 periods, as shown below. It can be modified by going to Settings > Indicators > Coppock.