15 Coppock Curve

The Coppock Curve looks at rate of change in price to quantify momentum and major downturns and upturns in a stock.

To calculate this index one calculates the difference in price between the most recent close price and the close price at two given prior times (usually 11 and 14 prior periods), the so-call Rate-of-Change (ROC). Those two ROC are added for each time period, and then an EMA is applied to those values, which becomes the Coppock curve.

When the ROC is positive suggest price is going up. By adding, the ROC over two time periods, the Coppock ensures to capture the price tendency.

Inflection point is Coppock indicate price reversal; crossover zeros may show momentum as well as price reversals…

Figure 8.25: Coppock