The Chikou Span is the comparison of today’s closing price to the price of that same asset 26 periods ago. It’s like Back to the Future, stock market style. The market is bullish when the price is above where it was 26 days ago, and bear if it’s below. This is the lagging span of the Ichimoku Cloud, so, uh...we'll talk about that, too.
The cloud is a one-stop indicator system that shows momentum for a particular security. The other pieces are the conversion line (Tenkan-sen), which shows the midway of the 9-day high and low. The baseline (Kijun-sen) shows the midway of the 26 period high and low. Leading span (Senkou span) A is the conversion line added to the base, and leading span B is the midway of the 52 period high and low.
We know that’s a lot of names and numbers all at once, so look at it this way...the Ichimoku tracks values for a lot of timeframes. Presented all in one graph, it shows the movement of the share, conveniently (and even brightly) colored.
