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1997issue C041-9

Confirm the MACD turn with price, then exit on the histogram

The historical workflow builds MACD from two moving averages of closing price and still rejects the conventional crossover as a complete rule. A long setup needs a rising weekly MACD and a price break above the prior week's high. After the histogram turns down, the exit is a sell-stop at that bar's low for the following week.

  • The MACD line is the difference between a shorter and a longer moving average of closing price, then compared with a moving average of that difference.
  • Conventional crossovers can lag the early part of a major move and can force an early exit on the sell side.
  • A long setup is defined only when last week's MACD is higher than the MACD two weeks ago and this week's price exceeds the prior week's high.
  • After a downturn in the MACD histogram, the exit rule places a sell-stop at that bar's low for the following week.
Entries in this reading3 entries
Current trackMACD115 readingsPrice-indicator divergence142 readingsMoving average449 readings

Two moving averages, then a second average

The MACD line is the difference between a shorter and a longer moving average of closing price, then compared with a moving average of that difference.

A conventional signal is to buy when a rising MACD line crosses above its signal line and to sell when it crosses below.

The archive notes two practical drawbacks of that conventional reading: lag that misses the early part of a major move, and sell signals that can force an early exit.

Direction matters more than the signed level

In the worked examples the MACD is scaled as a percent of close so its magnitude can be compared across securities with different prices.

The archive treats the direction of MACD as more important than its signed level, including the case of a rising but still negative reading.

The long setup and the following-week stop

A long setup is defined only when last week's MACD is higher than the MACD two weeks ago and this week's price exceeds the prior week's high.

After a downturn in the MACD histogram, the exit rule places a sell-stop at that bar's low for the following week.

Price-indicator divergence and weekly charts

Price making a new high while MACD fails to confirm, or price making a new low while MACD holds a higher low, is presented as price-indicator divergence that can warn of a turn.

The archive prefers weekly MACD charts over daily ones in these examples and warns that searching for historically outstanding parameter sets does not guarantee later results.

Value Line weekly closes through the 1987 peak

Weekly Value Line closes chop in the low 220s through late 1986, confirm a long with the January 1987 breakout, pause near 250, then print a higher high around 287 in August — the high Vakkur flags as unconfirmed by MACD. Closes were read from the SuperCharts weekly candlestick pane of that 1986–87 chart.
Weekly Value Line closes chop in the low 220s through late 1986, confirm a long with the January 1987 breakout, pause near 250, then print a higher high around 287 in August — the high Vakkur flags as unconfirmed by MACD. Closes were read from the SuperCharts weekly candlestick pane of that 1986–87 chart.Value Line Index · Weekly · 1986-07-01T00:00:00.000Z to 1987-10-31T00:00:00.000Z

The source’s mechanical examples fix a 9-week minus 12-week MACD on weekly bars and ignore the signal line. Digitized closes are approximate to the nearest few index points.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
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19971-3 pp.Next on MACDReconstructing a stochastic oscillator, MACD, and a triple-smoothed oscillatorPercent-K locates the latest close inside a chosen high-low lookback and scales that position onto a 0 to 100 range.
All readings on this track · 80 readings
  1. 1988Rebuild MACD-Mo and MACD-H before treating them as signals
  2. 1989Four-span MACD lookbacks as perishable parameters
  3. 1989Weekly then daily MACD confirmation on individual stocks
  4. 1991Regime-gated MACD and stochastic rules inside a checklist
  5. 1991Constructing MACD signal lines and divergence tests
  6. 1991MACD parameter order and cycle phase lag
  7. 1992Lengthened bond MACD as an equity regime filter
  8. 1992Long-horizon MACD construction from paired exponential averages
  9. 1993Constructing a signed ten-point trend filter
  10. 1994Constructing lag-reduced double exponential averages for MACD
  11. 1994Seeding DEMA2 filters to build a MACD signal
  12. 1994Constructing MACD from lag-reduced exponential averages
  13. 1994TEMA1 from nested exponential averages, then a two-horizon MACD
  14. 1994Constructing entry and exit on a relative-strength MACD
  15. 1994Constructing a relative-strength MACD crossover spreadsheet
  16. 1995Consensus presignal filters for Relative Strength Index, MACD and the Stochastic oscillator
  17. 1997Confirm the MACD turn with price, then exit on the histogram
  18. 1997Reconstructing a stochastic oscillator, MACD, and a triple-smoothed oscillator
  19. 1997Moving-average windows before crossovers and MACD
  20. 1999Second-stage MACD on relative-strength inputs
  21. 1999Constructing MACD from exponential-average spreads for crossover and divergence
  22. 1999Coding candlesticks into numeric indicators
  23. 2001Second-low confirmation with a percentage oscillator and money-flow filter
  24. 2001Constructing MACD from exponential average spreads and a signal line
  25. 2002Separate bounded and trend-following oscillator rules
  26. 2002Sort the regime before assigning MACD and stochastic jobs
  27. 2002Building classic divergence filters from RSI and MACD
  28. 2002Weekly highs and lows as trend gates
  29. 2002Constructing channel-normalized Fisher reversal signals
  30. 2002Affine-price and the Fisher transform as a constructed companion to MACD
  31. 2003Regularized EMA construction with a MACD line and a thrust oscillator
  32. 2003Curvature-penalized exponential averages versus MACD
  33. 2003MACD, moving averages, and a trend filter as one timing system
  34. 2003Fractional MACD and linear-regression reversal construction
  35. 2004Weekly MACD-histogram timing of bear-market rallies
  36. 2004Candlestick triggers filtered by MACD divergence
  37. 2004Staging energy-complex tops with trendline, breakout, and MACD
  38. 2005Selling climax holds versus fails
  39. 2006Treat a sideways Wave as permission before a breakout
  40. 2007MACD with a Stochastic oscillator for spotting trend reversals
  41. 2007Rebuilding an S&P 500 fifth-wave count after a broken target
  42. 2007Constructing MACD, RSI, and stochastic confirmation for futures
  43. 2007MACD histogram divergence needs a confirming close
  44. 2007Write the plan as a stack: ratio, boundary, then oscillators
  45. 2008MACD divergence and Stochastic oscillator confirmation on lumber futures
  46. 2008Assign confirmation, timing, and a stop before a currency pair is tested
  47. 2008Confirm the ten-bagger launch path before the MACD exit
  48. 2008Reading the offloaded evidence file
  49. 2008A Leader companion for MACD direction warnings
  50. 2008Relative strength exits with MACD averages and RSI
  51. 2008Assign one job per indicator in a three-screens rule set
  52. 2008Sequencing RSI, MACD, and average crossovers
  53. 2010Constructing the Schaff Trend Cycle from MACD and a dominant-cycle window
  54. 2010Schaff Trend Cycle as a MACD and Stochastic oscillator combination
  55. 2010Combining Relative Strength Index, the stochastic oscillator, and MACD as slope filters
  56. 2010Short-term wave and ratio clues without direction calls
  57. 2010A precise pullback entry and an unplanned profit-protection exit
  58. 2010Filtering MACD false signals with trendline breaks
  59. 2011Vendor feeds as an input variable in a MACD evaluation
  60. 2012Out-of-the-money versus in-the-money option sensitivity to implied volatility
  61. 2012MACD window tuning as hold-time control
  62. 2012Combining a moving-average crossover with MACD and support-resistance
  63. 2012Testing a published MACD entry with a histogram and signal-line agreement filter
  64. 2012Treat sample systems as a lab before live rules
  65. 2013Constructing moving averages and MACD from one price series
  66. 2013The next-bar price that forces a MACD signal-line cross
  67. 2013Constructing next-bar MACD reversal prices
  68. 2013Constructing inverted MACD reversal prices
  69. 2014Shared-filter combinations of the stochastic oscillator, MACD, and RSI
  70. 2014Square-root lookbacks for combined MACD and RSI
  71. 2015Audit open interest and trend before trusting oscillator crossovers
  72. 2016MACD without a signal line, confirmed by moving-average trend filters
  73. 2016Use RSI, MACD, and a moving average as a market-health consensus
  74. 2016MACD line versus histogram is a display problem first
  75. 2017Weekly and daily MACD on a single daily chart
  76. 2017Weekly and daily MACD as a stacked momentum filter
  77. 2017Nested weekly and daily MACD from paired EMA spreads
  78. 2018Weekly and daily PPO scale versus MACD, with bounded RSI and stochastic readings
  79. 2018Constructing a weekly and daily percentage price oscillator
  80. 2020Constructing Wyckoff tape reading with MACD, moving-average, and RSI filters
By fieldIndicators and filters682 readingsBy year199756 readings
All 115 readings tagged MACD
Also on MACD5 readings
1989Weekly then daily MACD confirmation on individual stocks2001Constructing MACD from exponential average spreads and a signal line2008A Leader companion for MACD direction warnings2017Nested weekly and daily MACD from paired EMA spreads2017Weekly and daily MACD as a stacked momentum filter