McClellan Histogram Stock Indices Technical Analysis and McClellan Histogram Stock Indices Signals

The McClellan Histogram is a graphical representation of the McClellan Oscillator and its signal line. This difference between the two is drawn as a histogram.

This is an oscillator indicator, the center line is the zero crossover mark which is used to generate buy and sell stock indices signals.

McClellan Histogram

Stock Indices Technical Analysis and Generating Stock Indices Signals

The Histogram is momentum indicator. Signals are generated using the center line crossover method.

• Bullish signal- Above Zero


• Bearish Signal - Below Zero

There are two fundamental techniques for using this indicator to generate stock indices signals.

Zero-Level Crossover- When the histogram crosses above zero a buy stock indices signal is generated. otherwise, when the histogram oscillator crosses below zero a sell stock indices signal is generated.

Technical Analysis

Divergence Stock Index - divergence trading between this indicator and the stock index price chart can prove to be very effective stock index trading strategy in identifying potential stock indices trend reversal stock indices signals and stock indices trend continuation signals.

There are several types of divergence signals:

Stock Indices Trading Trend Reversal Stock Indices Signals - Classic Divergence Signals

• Stock Indices Classic Bullish Divergence Signals - Lower lows on stock index price chart and higher lows in the McClellan Histogram

• Stock Indices Classic Bearish Divergence Signals - Higher highs on stock index price chart and lower highs in the McClellan Histogram

Stock Indices Trading Trend Continuation Signals - Hidden Divergence Signal

• Stock Indices Hidden Bullish Divergence Signals- Lower lows in McClellan Histogram and higher lows in stock index price chart

• Stock Indices Hidden Bearish Divergence Signals- Higher highs in McClellan Histogram and lower highs in stock index price chart

To Learn more about divergence navigate to the divergence trading topic on this website