In stock market investment, technical analysis is one of the decision-making tools that many investors rely on, among which the MACD indicator is widely used in trend judgment and buying and selling timing because of its intuitive and practical characteristics.
This article will delve into the six "golden cross" intervention points in the MACD indicator to help investors capture market opportunities more accurately.
MACD six golden crosses
30 days secondary metal balance
When a stock shows a golden cross for the first time, it indicates that the trend may have changed from falling to rising in the short term.
If the second golden cross is repeated shortly after on a timeframe of no more than 30 days, this scenario often indicates two scenarios: either a short correction in an uptrend, or a second start after a pullback confirms the bottom.
Either way, it greatly increases the likelihood of subsequent price increases.
Within 30 days, the red column has shrunk and the fork has not died, and the golden fork on the zero axis has been reproduced
If the MACD red bar decreases and does not reach the death fork, it usually indicates that it is experiencing a slight correction on the way up.
Once there is another cash fork above the zero line in the short term, this strongly suggests that the stock may be in the final deep consolidation phase on the eve of the rally, and the probability of a subsequent upside is extremely high.
Generally 0 axis on the golden cross
The golden cross can be divided into two categories according to the location of the occurrence: above the zero axis and below the zero axis.
The golden cross below the zero line marks the beginning of the trend from bearish to upward, during which it may be accompanied by fluctuations.
In contrast, if the golden cross appears above the zero line, it is more of a reflection of a short-lived consolidation in an uptrend.
Therefore, the appearance of the golden cross on the zero axis often indicates a large increase in the probability of subsequent price increases.
2 golden crosses under the 0 axis, about 30 day intervals
The golden cross below the 0 axis often indicates the formation of a short-term bottom, and if it is repeated in the short term (the time difference is not more than 30 days), it is very likely to be a reconfirmation of the bottom.
The golden cross is under the 0 axis, and the red bar appears
It is widely known that the red and green bars of the MACD reflect the change in market energy, where the red bar represents the bullish force and the green bar symbolizes the bearish momentum.
Therefore, when a golden cross appears below the 0 axis, it not only shows that the short-term trend is turning from falling to rising, but also the accompanying red column is a direct manifestation of energy conversion - the initial stage of turning from empty to long.
The combination of these two signals strongly indicates the prospect of a high probability of an upward trend.
The golden cross after the second bottom divergence of the MACD
It is generally recognized that the success rate of using the MACD bottom divergence signal to buy the bottom is significantly higher than that of the first underwater golden cross.
However, one of the major challenges with bottom divergences is that they can be repeated multiple times, although double bottom divergences have been observed to be more common than triple and above.
Therefore, when the second bottom divergence is accompanied by the golden cross, the safety and success rate of the bottom-buying strategy are greatly improved, and it becomes a more reliable time to enter the market.
To grasp the six golden cross intervention points of MACD, it is necessary to conduct a comprehensive analysis based on factors such as market environment, stock fundamentals and trading volume, and cannot rely solely on a certain indicator to make decisions.
Investors should continue to learn, flexibly use various technical analysis tools, and continuously optimize their trading strategies based on practical experience to achieve the goal of making steady profits in the stock market.
Remember, be patient and wait for the best time to act accurately to ride the waves in the market volatility.
Well, that's all for today's content sharing! Happy learning! See you next time!