The Moving Average Oscillator, also called Oscillator of Moving Average, or just OsMA, is a technical indicator that usually shows the difference between an oscillator and a moving average of the oscillator. Thus the the signal line of MACD is used for smoothing and the basic line of MACD is used as an oscillator.
If the Moving Average of Oscillator ceases to move down and starts to move up, this could be a signal for buying. If the indicator stops increasing and begins to fall down, then this is a signal for sale. The disparity of the price and OsMA is considered to be reliable signal.
The calculation of this indicator is the following:
The Moving Average Oscillator could be calculated from the Moving Average Convergence/Divergence indicator (MACD) and its signal line. The signal line is a 9 period simple moving average of MACD.
SIGNAL = SMA( MACD, 9 )
OSMA = MACD – SIGNAL
You could specify the moving average types and the number of periods used to calculate the moving averages in the Moving Average Oscillator parameters menu.