Comment on Indicators (Part 2)

DIVYA SANGHVI commented on 19 Nov 2017, 09:43 PM

Hello Karthik,
Thank you for your efforts.
Can you please help me with the below doubt?
Conversion and diversion as explained in this chapter:
‘When the MACD Line crosses the center line from the negative territory to positive territory, it means there is divergence between the two averages. This is a sign of increasing bullish momentum; therefore one should look at buying opportunities. From the chart above, we can see this panning out around 27th Feb
When the MACD line crosses the center line from positive territory to the negative territory it means there is convergence between the two averages. This is a sign of increasing bearish momentum; therefore one should look at selling opportunities. As you can see, there were two instance during which the MACD almost turned negative (8th May, and 24th July) but the MACD just stopped at the zero line and reversed directions’

When the MACD is at/around the zero line, it means that the two EMAs have no difference. -> Should not this be considered as ‘Conversion’?
When the MACD line goes over/under the zero line -> The variation between the 2 EMAs is increasing -> Should not this be considered as ‘Diversion’?

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