The Chaikin Oscillator is a moving average oscillator based on the accumulation/distribution line. It is an indicator of the accumulation/distribution…i.e. an indicator of an indicator.
The Chaikin Oscillator is calculated by subtracting the 10-period exponential moving average of the accumulation/distribution line from the 3-period exponential moving average of the accumulation/distribution line.
A buy signal is offered when the oscillator crosses over the centerline while sell signal is offered when the oscillator crosses down through the centerline.
Also, like many indicators, a divergence between the pricing action and the indicator's movement is a warning that the underlying issue's trend may reverse in the short term. So if a stock trends up while the Chaikin Oscillator rolls over and heads down, the stock will very likely top out soon after. On the other hand, if a stock trends down while the oscillator bottoms out and begins to move up, the stock will likely follow suit.