Ichimoku cloud

A multi-faceted indicator used in technical analysis for stock trading designed to give support/resistance levels, trend direction, and entry/exit points of varying strengths. General theory behind this indicator states that if price action is above the cloud, the overall trend is bullish, and if below the cloud, the overall trend is bearish. There are also moving averages (the Tenkan and Kijun lines) which act like the MACD crossover signals with the Tenkan crossing from underneath the Kijun as a bullish signal, while crossing overhead giving a bearish signal. Other lines are Chiku, Kumo 1 and Kumo 2.Chiku is an important line. If both the Chiku line and the price are in an uptrend then this signals a buy. A signal is also generated if the Chiku line crosses the price action i.e. used in a similar way to a moving average. The kumo lines create a ´cloud´, which is an area of support or resistance. The market must break through the cloud to signal a buy or sell. They are used in a similar way to support and resistance levels.