Kijun Line (Base Line)

The Kijun-sen (Base Line) is one of the three lines used to create the Ichimoku Kinko Hyo (Ichimoku Cloud) technical indicator. It is a moving average that is calculated by taking the highs and lows of the previous 26 periods and averaging them. The Kijun-sen is plotted in the middle of the Ichimoku Cloud, and it is used to identify support and resistance levels.

The Kijun-sen can be used in a variety of ways. One common way to use it is to look for bullish divergences. A bullish divergence occurs when the price of the security is making lower lows, but the Kijun-sen is making higher lows. This indicates that the underlying trend is still bullish, even though the price is making lower lows.

Another way to use the Kijun-sen is to look for bearish divergences. A bearish divergence occurs when the price of the security is making higher highs, but the Kijun-sen is making lower highs. This indicates that the underlying trend is still bearish, even though the price is making higher highs.

The Kijun-sen can also be used to identify support and resistance levels. The Kijun-sen often acts as a support or resistance level, and traders can look to take long or short positions when the price approaches these levels.

Overall, the Kijun-sen is a versatile technical indicator that can be used in a variety of ways. It can be used to identify support and resistance levels, to look for bullish and bearish divergences, and to track the overall trend of a security.