The Ichimoku cloud (kumo)
A shaded band drawn from a stock’s own highs and lows and plotted five weeks ahead of them — above it is read as an uptrend, below it a downtrend, inside it unresolved.
Ichimoku Kinko Hyo — Japanese for "one-glance equilibrium chart" — is a system of several lines published by a Tokyo journalist in the 1960s. Most people who use it use one part: the shaded band, called the kumo or simply the cloud. Building it takes three midpoints, each the halfway point between the highest high and the lowest low over a stretch of trading. The 9-session and 26-session midpoints are averaged together to give one edge of the band. The 52-session midpoint gives the other. Everything between them is shaded, and that shaded region is what a price is described as being above, below or inside. Because both edges are midpoints of a RANGE rather than averages of closing prices, the cloud reacts differently from a moving average: it is flat while a stock stays within its recent extremes and steps only when the stock makes a genuinely new high or low.
One property makes the cloud unlike every other level in this glossary, and it is the property nobody guesses. Both edges are plotted 26 sessions INTO THE FUTURE. That is the indicator’s definition rather than a drawing convention, and its consequence is worth stating plainly: the band standing over today’s price was computed from where the stock was trading roughly five weeks ago. A stock that fell hard in the past month can still sit above a band drawn before the fall, and one that has already turned and rallied can still sit below it. stocks-llm names the date each band was drawn from on every page that shows this reading, for exactly that reason. The band’s height carries meaning too, and is shown alongside: a thin band is read as a barrier that gives way easily, a thick one as a level that has held for a while and takes effort to cross.
What the three positions are taken to mean, and what they are not. Above the whole band is read as an established uptrend, with the band beneath as the level that would have to give way; below it as an established downtrend, with the band above as the level that would have to be cleared; and inside it as genuinely unresolved, which is the one reading no moving average can express, since a price is always on one side of an average and can sit in the middle of a band. All of that is a description of where a price has got to, not a forecast of where it goes next, and the position says nothing about cause — a company below its cloud after disappointing results sits in the same list as one that drifted there in a quiet market. stocks-llm computes this nightly from split-adjusted daily highs, lows and closes, skips bars whose prices are vendor artifacts rather than letting one bad figure set a window’s extreme, and declines to report the reading at all for a company with too little history rather than shortening the windows to fit. Nothing here is advice.
Stocks trading above the Ichimoku cloud →
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Informational only — NOT financial advice. This is an educational definition, not a recommendation to buy or sell anything. Metrics on stocks-llm are delayed data and may be missing or stale. Always verify information independently and consult a qualified financial professional before making any investment decision.