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The Chaikin Accumulation/Distribution Oscillator, or Chaikin Oscillator(CO) is based on the concept behind the Accumulation/Distribution Index(ADI). The basic premise is that the degree of buying or selling pressure can be calculated by the location of a close relative to the high and low for the corresponding period. There is buying pressure when a stock closes in the upper half of a period's range and there is selling pressure when a security closes in the lower half of the period's trading range.

The Chaikin Oscillator may be an excellent tool for generating buy and sell signals when its action is compared to price movement. However, because this oscillator is an indicator of an indicator, it is prudent to look for confirmation of a positive or negative divergence, say a moving average crossover, before counting this as a signal.

Two bullish signals that can be generated from the Chaikin Oscillator: positive divergences and bullish centerline crossovers.

Two bearish signals that can be generated from the Chaikin Oscillator: a negative divergence and a bearish centerline crossover.

Marc Chaikin developed this indicator using the prior work of Joe Granville and Larry Williams.