What are the best technical indicators to complement the Haurlan Index?
The Haurlan index is a market breadth indicator used primarily to identify overbought and oversold conditions. Like most breadth indicators, the Haurlan index is best used in conjunction with other technical tools to confirm price trends. Because it is most commonly applied to the New York Stock Exchange (NYSE) or other large indexes, the Haurlan index is not naturally complemented by indicators or oscillators intended for individual stocks or securities.
The Haurlan index does not have specific thresholds for support and resistance lines. The intermediate-term 20-day exponential moving average (EMA) line within the Haurlan is intended to suggest trading ranges, but it only receives a cursory confirmation from the short-term line. Technical indicators that more clearly define support and resistance levels make excellent companions to the Haurlan. The most simple examples of support/resistance indicators are simple moving average lines or moving average envelopes.
Many short-term traders favor using Fibonacci retracements and clusters to clearly identify potential support and resistance lines. Some may not trust the Fibonacci methodology, but this indicator offers clear, responsive and easily distinguishable trading barriers.
The absolute breadth index can be combined with the Haurlan index to point out changes in volatility. This is helpful when trying to gain a sense of scope to place the relative values of the Haurlan into better context. Any number of volume or volatility indicators can serve this role, but another great candidate is the ease of movement index. Ease of movement is based on the relationship between an asset's price and its trading volume, and it can be plotted over time along with the Haurlan index.