Ichimoku Cloud

AAA

DEFINITION of 'Ichimoku Cloud'

A chart used in technical analysis that shows support and resistance, and momentum and trend directions for a security or investment. It is designed to provide relevant information at a glance using moving averages (tenkan-sen and kijun-sen) to show bullish and bearish crossover points. The "clouds" (kumo, in Japanese) are formed between spans of the average of the tenkan-sen and kijun-sen plotted six months ahead (senkou span B), and of the midpoint of the 52-week high and low (senkou span B) plotted six months ahead.




INVESTOPEDIA EXPLAINS 'Ichimoku Cloud'

The ichimoku cloud was developed by Goichi Hosoda, a Japanese journalist, and published in the late 1960s. It provides more data points than the standard candlestick chart.


The overall trend is up when prices are above the cloud, down when prices are below the cloud and flat when they are in the cloud itself. When senkou span A is rising above senkou span B the trend is stronger upward, and is typically colored green. When senkou span B rises above senkou span A, the trend is stronger downward and is denoted with a red-colored cloud.

RELATED TERMS
  1. Ichimoku Kinko Hyo

    A technical indicator that is used to gauge momentum along with ...
  2. Senkou Span A

    A component of the Ichimoku Kinko Hyo indicator that is used ...
  3. Chikou Span

    A component of the Ichimoku Kinko Hyo indicator that is created ...
  4. Senkou Span B

    A component of the Ichimoku Kinko Hyo indicator that is used ...
  5. Tenkan-Sen

    The mid-point between the highest high and lowest low of a particular ...
  6. Kijun-Sen

    A component of the Ichimoku Kinko Hyo indicator that is primarily ...
RELATED FAQS
  1. How do I create a profitable strategy when spotting a Tenkan-Sen Kijun Sen cross?

    The Tenkan-Sen and Kijun-Sen are the two primary leading and lagging indicators within the Ichimoku cloud technical trading ... Read Full Answer >>
  2. How do I spot support and resistance from Chikou Span?

    The Chikou span is the most unique of the five indicators that make up the ichimoku cloud. It is a very different sort of ... Read Full Answer >>
  3. How does a swing trader use the stochastic oscillator?

    The stochastic oscillator is a momentum technical indicator used to indicate points of possible price reversals. Swing traders ... Read Full Answer >>
  4. What Book Value Of Equity Per Share (BVPS) ratio indicates a buy signal?

    Book value of equity per share (BVPS) is a ratio used in fundamental analysis to compare the amount of a company's shareholders' ... Read Full Answer >>
  5. Does stockholders equity accurately reflect a company's worth?

    Stockholders' equity is one method to evaluate a company's worth. It tends to work better for companies in established industries ... Read Full Answer >>
  6. How can I spot trading opportunities looking at year-to-date (YTD) performance?

    Trading opportunities on the long side can be spotted by looking at stocks with the worst year-to-date (YTD) performance, ... Read Full Answer >>
Related Articles
  1. Bonds & Fixed Income

    Dragons, Samurai Warriors And Sushi On Wall Street

    From samurai to sushi, there's no denying the East Asian influence on investing terminology.
  2. Forex Education

    An Introduction To Ichimoku Charts In Forex Trading

    Discover how this high-flying application can be used in forex trading.
  3. Forex Education

    A Glance At An Equilibrium Chart

    The easy-to-use Ichimoku chart can tell you quite a bit in just one glance.
  4. Chart Advisor

    Watch These Stocks For Breakouts Right Now

    Breakouts are imminent in these four stocks, leading to potential buying, selling or short selling opportunities.
  5. Chart Advisor

    Chart Advisor for July 3 2015

    Weekly technical summary of the major U.S. indexes.
  6. Chart Advisor

    Stocks Breaking to Downside - Time to Sell?

    These stocks have broken patterns or trendlines to downside, indicating more selling could be coming.
  7. Chart Advisor

    3 Ways To Trade The Bounce In Coal

    News from the Supreme Court has caused active traders to turn their attention to the coal markets. We'll take a look at how to trade the bounce.
  8. Chart Advisor

    How Investors are Profiting from Cyber Crime Fear

    An ETF that has seen significant gains this year in the growing field of cyber security, and the threat and fear of cyber attacks and cyber crime.
  9. Fundamental Analysis

    Are Fast-Casual Restaurants Overvalued?

    Can fast-casual restaurants actually grow to the levels that investors believe they can?
  10. Chart Advisor

    Buy These Stocks on The Pullback

    These four stocks are in upward sloping trend channels and have recently pulled back toward the bottom of the channel, providing a buying opportunity.

You May Also Like

Hot Definitions
  1. Inbound Cash Flow

    Any currency that a company or individual receives through conducting a transaction with another party. Inbound cash flow ...
  2. Social Security

    A United States federal program of social insurance and benefits developed in 1935. The Social Security program's benefits ...
  3. American Dream

    The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version ...
  4. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  5. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  6. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!