Chaikin Money Flow (CMF)

The Chaikin Money Flow (CMF) indicator, like On-Balance Volume (OBV), is intended to show whether money is flowing into an equity or flowing out of an equity.

Chaikin Money Flow (CMF)

The Chaikin Money Flow (CMF) indicator, like On-Balance Volume (OBV), is intended to show whether money is flowing into an equity or flowing out of an equity.


Chaikin Money Flow Calculation

The indicator is constructed by comparing the closing price to the daily high/low range and then comparing this result to the total volume.

Chaikin Money Flow Interpretation

A positive Chaikin Money Flow indicates that the stock is strong while a negative CMF indicates that the stock is weak.  The CMF indicator passing through the zero line (rising above or falling below) may indicate a shift in the overall trend for the equity.

When a divergence between the Chaikin Money Flow indicator and price happens, the price trend line is expected follow the Chaikin Money Flow trend line.

Chaikin Money Flow indicator graphed below a price chart

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