The word aroon is Sanskrit for "dawn's early light." The Aroon indicator attempts
to show when a new trend is dawning. The indicator consists of two lines (Up and
Down) that measure how long it has been since the highest high/lowest low has occurred
within an n period range.
When the Aroon Up is staying between 70 and 100 then it indicates an upward trend.
When the Aroon Down is staying between 70 and 100 then it indicates a downward trend.
A strong upward trend is indicated when the Aroon Up is above 70 while the Aroon
Down is below 30. Likewise, a strong downward trend is indicated when the Aroon
Down is above 70 while the Aroon Up is below 30. Also look for crossovers. When
the Aroon Down crosses above the Aroon Up, it indicates a weakening of the upward
trend (and vice versa).
The Aroon indicator was developed by Tushar S. Chande and first described in the
September 1995 issue of Technical Analysis of Stocks & Commodities magazine.