MACD Indicator Cross-over Stock Indices Signals

MACD Center line crossovers generate stock signals using the center line mark. The sentiment of the market can be confirmed using the MACD center line crossovers. MACD crossover above the center line mark generates bullish stock market sentiment while crossover below the center line generates bearish market sentiment.

• When the FastLine crosses below the MACD Line (not center mark) it shows market momentum is slowing - this is not a reversal signal or a sell signal, wait for the center-mark crossover.
• When the Fast line crosses above the MACD Line (not center mark) it shows the market momentum is slowing - this is not a reversal signal or a buy signal, wait for the center-mark crossover.
• The Center-Line crossover signals will be the best signals for validating buy and sell signals.

Using the Stock Indices chart in the example illustrated below, when MACD fast line crossed below the zero center mark, the sell signal was confirmed and the market sentiment changed to bearish - downwards stock trend.

Also in the example illustrated below when MACD fast line later crosses above zero center mark, a buy signal was generated and the market sentiment changed to bullish - upwards stock trend.

MACD Zero-Line Mark Crossover - Precisely When a Sell Stock Indices Signal and Buy Stock Indices Signal are Generated

Oscillation of the MACD Indicator

The MACD indicator is an indicator that moves up and down around a zero center line mark. The center-line is the neutral measurement, values above zero will indicate bullish stock market trend while values below indicate bearish stock trend.

The MACD indicator is also used to indicate overbought and oversold levels. When the MACD reaches overextended levels, then a stock indices instrument is overbought or oversold. However, in a strong upward trending market stock prices will stay overbought in this case it's better to buy.

Also in a strong down stock trending stock market its better to sell, because stock prices will stay in the oversold region for a long time.

Overbought conditions occur above the zero line while oversold conditions occur way below the zero mark.

MACD Overbought Region - Trend Continuation Signal