Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Gemstar Intl (GMST) -- Ignore unavailable to you. Want to Upgrade?

To: quidditch who wrote (2897)	4/28/2000 2:36:00 AM
From: Jeff Bond	Read Replies (3) \| Respond to of 6516

MACD - Moving Average Convergence Divergence >>"The Moving Average Convergence Divergence (MACD) Trading Method is a price momentum indicator developed by Gerald Appel. This oscillator is based on the point spread difference between two exponential moving averages of the closing price. The solid line is the MACD line. The dotted line is called the 'trigger line.' When the MACD line is negative and below the trigger line watch the issue closely. When the MACD line moves back above the trigger line, this may be a good time to buy. Likewise, when the MACD line is positive and above the trigger line watch the issue closely. When the MACD line moves back below the trigger line, this may be a good time to sell or enter a short position."<< The indicator is a MOMENTUM indicator. It is used more to buy at a bottom than try and anticipate a top. The indicator uses a pair of exponential moving averages to compare the short-term and longer-term trends. When most stock corrects, eventually the longer-term trend will begin to turn up, while the short term trend still remains varied between negative and positive. This makes the trigger line bottom out while the indicator continues to head south. When the indicator line bottoms, comes back and passes UP through the indicator line, that is referred to as a MACD Crossover. Thie event is WIDELY used to "anticipate" momentum swings. I feel it is used by SO MANY institutions it is literally a self-fulfilling prophecy. Look at the volume the past 3-4 days, look at the price strength today after bouncing off the bottom. The people using technical analysis will be all over GMST, and I predict we will begin to see the price POP nicely. I've had good fortune in using MACD to anticipate a short-term top as well. In contrast to the standard method of waiting for a MACD crossover to occur at the top to sell, I like to sell as soon as MACD tops out and begins to head south. It's been my experience when momentum is leaving ... momentum is leaving ... hence if you're a short-term trader when you see momentum leaving, you might as well make like a momentum short-term trader ... and get leaving ... leaving it at that :o) Regards, JB