Bullish & Bearish Stock Indices Trade Signals

The MACD Indices indicator is one of the most widely and commonly used Stock Indices indicators available. MACD indicator is a momentum oscillator with some trend following characteristics.

MACD technical indicator is one of the most popular indicators used in Stock Indices technical analysis. MACD indicator is used to generate trading signals using crossovers.

MACD plots the divergence & convergence of moving averages. MACD indicator is constructed using moving average analysis. Moving Average Convergence/Divergence is a trend-following Stock Indices technical indicator. MACD indicator shows the correlation between two moving averages.

One moving average is of a shorter period & the other for a longer period of price bars.

MACD Indicator - MACD Indicator Analysis

MACD Indices indicator has a zero center line: values above zero line are bullish while those below zero are bearish.

In an upwards Stock Indices trend the shorter MACD line rises faster that the longer MACD line this creates a gap. In addition as long as the MACD indicator is above the center mark the trend is still bullish as is shown below.

Do not sell as long as the MACD Indicator is above the Center Mark - this is bullish territory and it does not matter how it's moving as long as it is above the zero center mark, as shown on example below.

MACD Indicator Above Zero Mark - Bullish Stock Indices Trade Signal

In a downwards Stock Indices trend the shorter MACD line falls faster than the longer MACD line this creates a gap. In addition as long as the indicator is below the center mark the trend is still bearish as is shown below.

Do not buy as long as the MACD Indicator is below the Center Mark - this is bearish territory and it does not matter how it's moving as long as it is below the zero center mark, as shown on example below.

MACD Indicator Below Zero Center Line Mark - Bearish Stock Indices Trade Signal

When the Stock Indices trend is about to reverse the MACD lines begin to move closer to each other, thus closing the gap.