Charts MACD 1. MACD – moving average convergence divergence 2. Developed by Dr, Gerald Appel 3.

Probably the most consistent indicator of significant trend changes is a stock 4. The most commonly used indicator in the world. 5. Looks at several price-average changes over time (short term). 6. It shows when the momentum pressure is getting stronger either upward or downward. 7. The MACD is the combination of two moving averages – a fast one and a slow one – and how they interact (how they converge and diverge). 8. It shows when institutional fund managers are sneaking in or sneaking out of a stock. 9. It uses moving averages (MAs). a. MA is the average of the price over some time period. b. The MA is recalculated every day after the closing prices are in. 10.Most MACDs use an exponential moving average (EMAs) to get a smoother line that takes out unnecessary bounces up and down. 11.The MACD uses three EMAs: a slow EMA, a fast EMA, and the “trigger” EMA. 12.Dr. Appel determined a. the best slow or long term period is the 26-day EMA b. the best fast or short term period is the 12-day EMA c. He calculates the difference between the two EMAs i. This number is the MACD plot point for that day. d. He then plots the 12-26 MACD for the day against the 9-day EMA. 13. When the MACD crossed above the 9-day EMA a. the stock was very likely to continue to go up in price 14. When the MACD crossed below the 9-day EMA a. the stock was likely to continue to go down 15.The crossing points are called “trigger points” 16. Thomas Aspray added a histogram that represents the variance between the 12-26 MACD and the 9-day EMA a. the 9-day EMA is represented by the “zero” line b. Trigger points are the points at which the histogram crosses the “zero” line. 17. Dr. Appel found that better results were achieved by using the “8-17-9” MACD. Stochastics 1. Developed by Dr. George C. Lane 2. A momentum tool that tracks the overbuying and overselling of a stock. 3. Overselling a. When a large institution starts selling and others join in. b. Creates downward pressure on the stock price.