The Price Oscillator (PPO) is a technical indicator used in financial analysis to measure the percentage difference between two moving averages of an asset's price. It helps identify potential buying and selling signals based on the relationship between short-term and long-term price trends. The PPO calculates the percentage difference between a shorter-term exponential moving average (EMA) and a longer-term EMA. It then represents this difference as a line on a chart, oscillating around a centreline or zero line.

When the PPO line crosses above the centreline, it suggests a bullish signal, indicating potential buying opportunities. Conversely, when the PPO line crosses below the centreline, it suggests a bearish signal, indicating potential selling opportunities. Traders and investors use the PPO to identify trend reversals, confirm the strength of a trend, and spot potential divergences between the indicator and the price chart. Divergences occur when the price makes new highs or lows, but the PPO fails to confirm these moves, potentially signalling a trend reversal.

It's important to note that the PPO should be used in conjunction with other technical analysis tools and indicators to confirm trading signals and make well-informed decisions. Like any indicator, it has its limitations and should not be relied upon in isolation. By understanding the PPO indicator and its interpretation, novice traders and investors can gain insights into the relationship between short-term and long-term price trends and potentially identify favourable trading opportunities.