McClellan Histogram Analysis & McClellan Histogram Signals

The McClellan Histogram is a graphical representation of the McClellan Oscillator & its signal line. This difference between the 2 is drawn as a histogram.

This is an oscillator, the center-line is the zero cross over mark which is used to generate buy and sell signals.

McClellan Histogram

Technical Analysis and Generating Stocks Signals

The Histogram is momentum indicator. Signals are generated using the center line cross over technique.

• Bullish signal- Above Zero
• Bearish Signal - Below Zero

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

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

Analysis in Stocks Trading

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

There are several types of Trade Divergence Stocks Trade Signals:

Trend Reversal Signals - Classic Divergence Signals

• Stocks Classic Bullish Divergence Signals - Lower lows on price chart and higher lows in the McClellan Histogram

• Stocks Classic Bearish Divergence Signals - Higher highs on price chart and lower highs in the McClellan Histogram

Trend Continuation Signals - Hidden Divergence Signal

• Stocks Hidden Bullish Divergence Signals- Lower lows in McClellan Histogram and higher lows in price chart

• Stocks Hidden Bearish Divergence Signals- Higher highs in McClellan Histogram and lower highs in price chart

To Learn more about divergence go to the divergence topic on this site