mc, speaking of MACD and RSI divergences
We've had much talk on the board lately regarding indicator divergences, particularly MACD and others, but I'm beginning to question their reliability in certain setups. I know, of course, that the divergences only implicitly speak of probabilities and not certainties, but I've not read anyone to mention what those probabilities are, and what other factors have to be taken into account before the probabilities are significant.
Take this chart, for instance:
stockcharts.com[h,a]daclyyay[pb7!b17][vc60][iLah12,26,9!Lb14]&pref=G
One could have called for a top in mid-September due to MACD and RSI divergences, but instead we got only a slight downturn and then a new high. And similarly, one could have called for a top in mid-October based on divergences on the MACD, and the stock got only a slight decline and then more new highs.
Can you think of other significant indicators that should be brought into the picture when trying to use these indicator divergences as a clue to future direction, i.e. other indicators that might help one draw conclusions about the reliability of these divergences for showing imminent moves? |
