Kijunsen

Kijunsen, also called the base line, is one of the main lines in the Ichimoku Kinko Hyo technical indicator. It is calculated as the average of the highest high and the lowest low over the previous 26 periods: Kijunsen = (highest high + lowest low) / 2 for the last 26 candles.

The Kijunsen serves as a dynamic support and resistance level and as a gauge of medium-term trend. The slope of the line reflects momentum: a rising Kijunsen suggests an uptrend, a falling line indicates a downtrend, and a flat line points to consolidation. The line interacts with other Ichimoku components and is used in conjunction with them, notably in the calculation of Senkou Span A.

Trading signals commonly associated with Kijunsen include the cross of Tenkan-sen (conversion line) and Kijunsen. A bullish signal occurs when Tenkan-sen crosses above Kijunsen; a bearish signal occurs when Tenkan-sen crosses below. The price’s interaction with the Kijunsen, such as crossing above or below it, can also signal shifts in trend or acts as a test of support or resistance.

Limitations of Kijunsen include its nature as a lagging indicator, due to the 26-period lookback, which can delay signals in fast-moving markets. It is best used as part of the broader Ichimoku system and together with price action for confirmation.

See also: Ichimoku Kinko Hyo; Tenkan-sen; Senkou Span A; Senkou Span B; Chikou Span.