Vortex Indicator - VI

A “vortex indicator” sounds like it would be a great device to take to Sedona, Arizona on a quest to find one of the area’s magical vortices, and receive some of its spiritual enlightenment. But don’t add it to your Sedona packing list just yet, because as it turns out, a vortex indicator has pretty much nothing to do with magical vortexes.

No, the “vortex indicator,” or “VI,” is an indicator that tells us whether a stock’s current trend is likely to continue, or whether a new trend has started. Which, we suppose, could bring its own form of enlightenment.

Anyway, the VI is basically just two plotted oscillating lines: one line (VI+) shows positive trend data, usually in green, and the other one (VI-) shows negative trend data, usually in red. When the lines are just cruising along on their merry ways, it means the stock’s current trend is continuing. When the paths cross, though, that’s when stuff gets real. That cross signals a trend reversal: if the stock was in an uptrend, now it’s crossing into a downtrend. If it was trending down, now it’s trending up. It’s a super simple way to quickly look at a pattern chart and see how the security is trending, and whether that trend looks like it’s about to change.