The Klinger Oscillator(KO) measures trends of money flows based upon volume.

The KO is derived from three types of data: the high-low price range, volume, and accumulation/distribution. Price range is a measure of movement and the force behind that movement is volume. Accumulation is when the sum of today's High, Low and Close is greater than yesterday's. Distribution is when today's sum is less than the yesterday's. When the sums are equal, the existing trend is maintained.

The KO works well for timing trades in the direction of the trend but can be less effective when going against a trend. However, when the KO diverges from the underlying price action, the observed trend may be losing momentum and nearing its completion.

A security achieving a new high or low for a cycle with the KO failing to confirm this shows a trend that may be losing momentum and is nearing completion.

If the price is in an uptrend (above an 89-day exponential moving average), buy when the KO drops to unusually low levels below zero, turns up, and crosses its trigger line. If the price is in a downtrend (i.e., below an 89-day exponential moving average), sell when the KO rises to unusually high levels above zero, turns down, and crosses its trigger line.

The KO, also known as Klinger Volume Oscillator (KVO), is developed by Stephen J. Klinger and published in Winter 1994/Spring 1995 issue of “MTA Journal”.