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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Ahmed Elneweihi who wrote (43469)4/29/1999 8:50:00 AM
From: marc chatman  Read Replies (2) of 95453
 
Ahmed, for my own calls, I look at a divergence as occurring simply when a new high price (or low price, as the case may be) is not matched by a higher (or lower, in the case of a new low price) MACD. I believe you are correct in pointing out that the index could rally strongly, pulling the MACD out of its divergence. It is also possible that any pull back could be small. And it is possible that the index could consolidate for awhile before making a run at a new high.

For trading purposes, however, I tend not to wait for the MACD to cross the signal line since a strong reversal could already be underway by then.

Also, there are some individual issues which are not showing a divergence. Possibly, there could be some stocks which continue to move up a bit while others consolidate.

And, finally, there is a possibility that all this TA could be BS. <g>
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