MACD-MAX Class A Divergence

Technical indicator gives the best trading signals when they diverge from prices. There are 2 types of divergences, Bullish divergences and Bearish divergence.

Bullish divergence occurs when price fall to a new low but the technical indicator refuses to decline to a new low. This shows that bears are losing power and bulls are gaining control. This often marks as the end of a downtrend.

Bearish divergence occurs when price reaches to a new high but the technical indicator refuses to rise to a new peak. This shows that bulls are losing power while bears are gaining control. This often marks as the end of an uptrend.

Class A Bullish divergence occurs when price reaches a new low but the indicator reaches a higher low than it did compares to the previous low. Bearish divergence occurs when price reaches a new high but the indicator reaches a lower high than it did compare to the previous rally.

Divergence between MACD and price is one of the strongest signals in technical analysis, because it always identifies major turning points and gives the most reliable signal for sell or buy.

In the chart below, MACD reaches max at the end of Feb and price reaches new high at the end of April, but MACD refuses to rise to a new peak. This shows that bears are gaining control. Price fall for about a month before it went up again.

MACD-MAX uses a special algorithm to detect the maximum MACD reading for a particular stock and only give signal when the indicator diverges from the MACD. We think this is the most reliable trading signal. We also give recommendation on the highest or lowest prices can go. (We strongly suggest you to perform you own due diligent before accepting any recommendation from us)

MACD-MAX scans for more than 3000+ stocks in NYSE and NASDAQ for MACD Class A Divergence and post the result in this blog. As divergence between price and MACD only occur few times (or non) a year for a particular stock, so you may not see results posted here everyday.