Ichimoku Cloud

Trend, support, and momentum in one picture.

Ichimoku is a complete system rather than a single indicator. It plots five lines, the most visible of which form a shaded 'cloud' projected ahead of price, acting as a zone of support or resistance. Price above the cloud Bullish. The cloud below acts as support. Price below the cloud Bearish. The cloud above acts as resistance. Price inside the cloud No trend. Stand aside. A thick cloud Strong support or resistance. A thin one is easily cut through. The cloud flipping colour ahead The projected trend is changing. Ichimoku's strength is that it answers several questions at once and refuses to give a signal in a directionless market. Its weakness is that it is dense, and beginners tend to see whatever they hoped to see in it.

Part of Learn NEPSE Investing, a free course on reading Nepali company accounts and charts. Section: Charts.