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Technical Analysis: Power Tools for Active Investors by Gerald Appel

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Synergy: MACD Confirmed by Other Technical Tools

MACD patterns are frequently very suitable for trendline analysis.

Chart 8.11 illustrates situations in which buy signals took place right in the area at which downward sloping trendlines were penetrated, and situations in which MACD sell signals were confirmed by declines in the MACD down and through rising uptrend lines.

Chart 8.11. Using Trendlines to Confirm MACD Signals: Russell 2000 Index, 1992

Signal line crossings that are confirmed by trendline penetrations of MACD lines as shown on the chart tend to be quite reliable.

The combination of trendline violation and MACD ...

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