Generalized Stockwell Transform (GST) was adapted to analyze a transmittance signal to continuously determine the refractive index and extinction coefficient. The process is built by analyzing oscillation frequencies of the transmission signal where oscillations exist. The simulation studies clearly show the advantage of the locally referenced phase property of the presented method. The validity of the method was checked for a CdS thin film. The results determined by the GST method are consistent with the results determined by envelope and other signal analyzing methods, and the literature. The noise and relative error analysis of the method was also discussed.