Aroon Indicator

Trend

What it measures

Aroon identifies when a new high or low occurred within a lookback period (default 25). Aroon Up measures how long since the highest high; Aroon Down measures how long since the lowest low. Both oscillate 0–100. It detects trend changes, trend strength, and the transition between trending and ranging markets.

How readings are interpreted

Aroon Up above 70 means a new high was set recently — bullish. Aroon Down below 30 means no new low recently — still bullish. When Aroon Up crosses above Aroon Down, a new uptrend may be starting. Both near 50 signals a ranging market with no clear direction.

Conventional levels

Aroon Up > 70 + Aroon Down < 30: strong uptrend
Aroon Down > 70 + Aroon Up < 30: strong downtrend
Aroon Up crosses above Aroon Down: new uptrend signal
Aroon Down crosses above Aroon Up: new downtrend signal
Both lines near 50: ranging market, no trend

Where it works, and where it does not

Best for identifying the early stages of a new trend from a ranging market. Less useful during established strong trends (it just confirms what's obvious) and during high-volatility spikes that create false 'new high' signals.

Commonly read alongside

ADX: Aroon crossover + ADX rising = trend initiation confirmation
MACD: Both confirming same direction = strong setup
Volume: Aroon Up crossing above Down + volume increase = confirmed breakout

Known limitations

In volatile choppy markets, Aroon Up and Down oscillate rapidly creating false crossovers
Aroon is relatively unknown compared to ADX — less 'self-fulfilling prophecy' effect
Gap days (earnings, overnight) can cause Aroon to spike without a genuine trend change

In practice

The crossover is conventionally treated as an early warning of trend change rather than a signal in itself, with price action used for confirmation
Aroon Up sustained above 70 for several weeks is read as a major trend in place, in which pullbacks are the usual focus
Paired with the 200 EMA, an Aroon uptrend reading with price above the average is regarded as stronger agreement
Both lines near 50 indicates no trend — the condition in which range-based methods are usually preferred

Plot it yourself. Add this indicator to a chart, change every parameter and watch the line move, then backtest how the rule would have behaved on historical data — free on the S&P 500 ETF, no card.

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This is reference material, not advice. It describes what each indicator measures and how its readings are conventionally interpreted. Nothing here is a recommendation to buy or sell anything, and no indicator predicts future prices. GU Analyser is an analytical tool — no money is ever traded here.