MetaStock Outside Day Function

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An outside day is almost the opposite of an inside day; however its interpretation is similar, in that it suggests a potential reversal or deceleration of the current trend. It occurs when the current period's high is greater than or equal to the high for the previous period and the current period's low is less than or equal to the low for the previous period. In other words, it's where the range of the latest period entirely engulfs the range of the previous period. As with inside days, if the following periods are still within this range MetaStock identifies the outside day as still existing.

SYNTAX Outside()

APPLICATION

Again, when interpreting the outside day it isn't really considered bullish or bearish; rather it foreshadows a significant move or breakout. As with the inside day, it's therefore best used in conjunction with other conditional statements. With this in mind, there's a general rule with technical analysis that say's "the higher the volume the more significant the associated pattern".

Let's combine both the outside day and this technical analysis rule:

Outside() AND V>Mov(V,21,S)

This formula stipulates that a security must display an outside day and that today's volume must be greater than the 21 period average of the volume. This obviously isolates more significant outside days, in that they have greater than average volume.

EXERCISE

Examine both the applications discussed within the inside day and outside day functions; using this information code an outside day that is within an uptrend (defined as the 7 simple period moving average being greater than the 21 period simple moving average) and that also exhibits increased volume (defined as the volume being at least 50% greater than the 21 period average of the volume).

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