The Elder Ray Index indicator consists of an exponential moving average. Bull Power is used to measure the potential for the price to increase above the moving average, and Bear Power is used to measure the potential for the price to decrease below the moving average. Long positions are taken when the Bear Power is below zero and there is a bullish divergence while short positions are assumed when the Bull Power is above zero and there is a bearish divergence. In this indicator, Bull Power is the result of subtracting the 13-period EMA from the high price of the day and Bear Power is the result of subtracting the 13-period EMA from the low price of the day.