This week I have added another indicator to the combination that we use. I have brought MACD, Moving Average Convergence Divergence, into the mix. This indicator measures the difference between the 12-day exponential moving average and the 26-day exponential moving average. This difference is MACD. In turn, MACD is filtered using a 9-day exponential moving average. The difference between MACD and its 9-day EMA is called the Divergence.
As an example of how to use the indicator, if you are looking for a BUY signal, you would want to see MACD greater than zero and the Divergence greater than zero. We have elected to use a system where we generate an alert if either one of these conditions is true and identify it as a Moderate strength MACD signal. If both conditions are true, we identify it as a Strong MACD signal.
Damage to our Alert HQ technical indicators continues and it is worse than ever. Against this backdrop, we see SELL signals way outnumbering BUY signals again. Here is the breakdown for this week:
- based on daily data, we have 9 BUY signals and 56 SELL signals
- based on weekly data, we 12 BUY signals and 133 SELL signals
Stop by Alert HQ and download your free lists. The lists based on weekly data show those stocks that have exhibited some good follow-through after a recent trend reversal. If you want to be early in identifying the newest trend reversals, the lists based on daily data are for you. No matter which preference you have, there are bound to be a few stocks you will want to add to your watch list.