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Accumulation/Distribution Line
ADX (Wilder's DMI)
Average True Range (ATR)
Chaikin Money Flow (CMF)
Chaikin Oscillator
Commodity Channel Index (CCI)
Comparative Relative Strength
MACD
MACD Histogram
Momentum
On Balance Volume (OBV)
Price Oscillator (PPO)
Rate of Change (ROC)
Relative Strength Index (RSI)
Stochastic Oscillator
Volume
Volume Oscillator (PVO)
Williams %R

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MACD Histogram

The MACD Histogram is similar in concept to the standard MACD except the histogram normalizes the signal or reference line to zero. This helps solve the lagging problem of the standard MACD.

The same principals apply here. Buy signals are generated when the MACD crosses over the zero line while sell signals are given when the zero line is crosses to the downside. Also when a stock moves up and the MACD Histogram fails to confirm the move, a divergence occurs. This signals a pullback may be coming. And when a stock moves lower while the MACD Histogram flattens out and moves up, a near-term bottom is likely.




The MACD Histogram is most useful when it diverges from the underlying stock. In the above example, NTES made a series of higher highs while in a steady uptrend, but its MACD Histogram trended down and did not confirm the move. The stock eventually gave in.



Here is a positive divergence. QQQ trended down, but the MACD made a series of higher lows and then crossed the center line. That was the signal to go long.


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