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Aroon Indicator

The Aroon indicator is a technical analysis tool that measures how many periods have passed since a security's highest and lowest prices, helping show whether a trend is present and how strong it may be.

What Is an Aroon Indicator?

The Aroon indicator is a technical analysis tool that measures how long it has been since a security reached its highest price and its lowest price over a set period. The name comes from a Sanskrit word meaning "dawn's early light." Its purpose is to help identify whether prices are trending, how strong that trend may be, and whether a new trend could be starting. It was introduced by technical analyst Tushar Chande in 1995.

How It Works

The indicator has two lines, Aroon Up and Aroon Down. Each is calculated over a lookback period, commonly 25 bars or periods.

Aroon Up = ((Period − Periods Since Highest High) / Period) × 100

Aroon Down = ((Period − Periods Since Lowest Low) / Period) × 100

Each line ranges from 0 to 100. A reading near 100 means the high (or low) occurred very recently, while a reading near 0 means it happened long ago. When Aroon Up stays high and Aroon Down stays low, prices are tending to make new highs, which is consistent with an uptrend. The reverse pattern is consistent with a downtrend. Traders often watch for crossovers, where one line moves above the other, as a possible sign that the trend is changing.

Some analysts also compute the Aroon Oscillator, a momentum indicator that subtracts Aroon Down from Aroon Up to produce a single value between −100 and +100.

Example

Suppose a stock's highest close in a 25-period window occurred 2 periods ago, and its lowest close occurred 20 periods ago. Aroon Up would be ((25 − 2) / 25) × 100, or 92. Aroon Down would be ((25 − 20) / 25) × 100, or 20. This pattern shows recent strength alongside an older low, which is consistent with an uptrend.

Limitations

Like most indicators based on past prices, the Aroon indicator lags the market and can produce false signals during sideways or choppy conditions. Its readings depend heavily on the chosen lookback period, so results can differ across settings. It is generally viewed alongside other tools rather than on its own. This entry is for educational purposes only.

Updated October 15, 2026. For general education only; not financial, tax or legal advice.

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Related Terms

Technical Analysis

Technical analysis is a method of evaluating securities by studying past market prices and trading volume, using charts and statistical indicators to identify patterns and forecast likely future price movements.

Uptrend

An uptrend is a sustained pattern in which a security's price makes a series of higher highs and higher lows, signaling that buyers are generally in control of the market over that period.

Downtrend

A downtrend is a sustained pattern in which an asset's price or a market index moves generally lower over time, marked by successively lower peaks and troughs.

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The Relative Strength Index is a momentum oscillator that measures the speed and size of recent price changes on a scale from 0 to 100, often used to flag overbought or oversold conditions.

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The Moving Average Convergence Divergence (MACD) is a technical indicator that shows the relationship between two exponential moving averages of a security's price, often used to gauge momentum and trend changes.

Stochastic Oscillator

A stochastic oscillator is a technical momentum indicator that compares a security's closing price with its recent price range, producing values from 0 to 100.

Average Directional Index (ADX)

The Average Directional Index (ADX) is a technical indicator that measures how strong a market trend is on a scale from 0 to 100, without indicating whether the trend is up or down.