MACD Indicator Cross-over Signals

MACD Center line crossovers generate trading signals using the center line mark. The sentiment of the market can be confirmed using MACD center line crossovers.

MACD Stock Index crossover above the center line mark generates bullish market sentiment while crossover below the center line generates bearish market sentiment.

• When the Fast line crosses below the MACD Line (not center mark) it shows Stock Index market momentum is slowing - this is not a reversal signal or a sell signal, wait for center mark crossover.
• When the Fast line crosses above the MACD Line (not center mark) it shows the market momentum is slowing - this is not a reversal trading signal or a buy signal, wait for center mark crossover.
• The Center-Line crossover signals will be the best trading signals for confirming buy & sell signals.

Using the trade chart in the example below, when MACD fast line crossed below the zero center mark, sell trading signal was confirmed & the market sentiment changed to bearish - downward trend.

Also in the example below when MACD fast line later crosses above zero center mark, a buy signal was generated & the market sentiment changed to bullish - upward trend.

MACD Zero-Line Mark Crossover - Precisely When a Sell Signal & Buy Signal are Generated

Oscillation of the MACD

The MACD indicator is an oscillator indicator that moves up and down around a zero center line mark. The center-line is the neutral measurement, values above zero will indicate bullish market trend while values below indicate bearish market trend.

The MACD indicator is also used to indicate overbought and oversold levels. When MACD reaches overextended levels, then a index is overbought or oversold. However, in a strong upward trending Stock market prices will stay overbought in this case its better to buy the index.

Also in a strong down trending market its better to sell the index, because prices will stay in the oversold region for a long time.

Overbought conditions occur above the zero line while oversold conditions occur way below the zero mark.

MACD Overbought Region - Stock Index Trend Continuation Signal