I did the coding for "rainbow" charts and the results are below. Thanks again to Mel Widner, Ph.D. for the original article on which this is based. Thanks also to Wealth-Lab.com for the tools to create this. The only small changes I made were to use a step of 3 and to extend the number of moving averages.
The first chart is "rainbow" only, the second is "rainbow" on top of the chart I normally look at. What price? Give a kid a box of crayons and this is what you get. Sorry for the fuzziness. This is again PAAS which has been used as a previous example. I do not use the "rainbow" for strict trading signals although a MACD style oscillator could be worked out to indicate narrow, cross, wide. I sure like the visuals it presents regarding the longer term.
"A man hears what he wants to hear and disregards the rest." Paul Simon, The Boxer.
PAAS is used as an example only and is not a recommendation to buy or sell this stock. Due diligence is your responsibility. If you need professional investment advice then find a professional.
Thank you for your time.
Charts courtesy of Wealth-Lab.com. http://wl4.wealth-lab.com/
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