slanted in the same direction.Pennants that slant against the trend serve as continuation patterns. There isan old saying “The pennant flies at half-mast” —a rally is likely to travel asfar after the pennant as it did before. A pennant that slants in the direction ofthe trend indicates exhaustion —a trend is nearing a reversal.
A widening triangle occurs when prices set a series of higher highs andlower lows. This pattern shows that the market is becoming hystericallyvolatile, with bulls and bears pouring in. The fight between bulls and bearsbecomes too hot for the uptrend to continue—a widening triangle kills anuptrend.
A diamond starts out as a widening triangle and ends as a symmetricaltriangle. You have to squint very hard to recognize it. Diamonds are primeexamples of Rorschach-type patterns for chartists. If you look long enough,you will find them, but their trading usefulness is minimal. I used to look fordiamonds . . . and most of them were fake zirconium.
Double Tops and Bottoms
Double tops occur when prices rally to the area of the previous high. Doublebottoms occur when prices fall near the previous low. The second top or bot-114 CLASSICAL CHART ANALYSIS
tom can be slightly above or below the first. This often confuses beginninganalysts.
Savvy traders use technical indicators to identify double tops and bottoms.They are often marked by bullish and bearish divergences. Buying at doublebottoms and selling short at double tops offer some of the best trading oppor-tunities.IV
Computerized TechnicalAnalysis
 
24. COMPUTERS IN TRADING
To be a successful trader, you must understand markets better than yourcompetitors do. You can analyze them more thoroughly using a computer.Many traders who compete with you in the markets already have thesemachines.
Manual charting can help you develop an intuitive, physical feel forprices. You can buy some graph paper and plot several stocks or commodi-ties each day. Once you post your charts, write down at what level you willbe a buyer or a seller and where you will place your stops.
After you do that for a while, you will probably want to analyze moremarkets using technical indicators. Then it is time to look for a computer andtechnical analysis software.
Driving or Walking
A trader without a computer is like a man traveling on a bicycle. His legsgrow strong and he sees a lot of scenery, but his progress is slow. When youtravel on business and want to get to the point fast, you get a car.
A computer can help you track and analyze more markets in depth. It cantake over routine tasks and free up your mind for thinking. A computer
115116 COMPUTERIZED TECHNICAL ANALYSIS
allows you to use more indicators and spot more opportunities in the mar-kets. Trading is an information game. A computer helps you process moreinformation. .
Computerized technical analysis is more objective than classical charting.You can argue about whether a head-and-shoulders pattern is present — butthere is never an argument about an indicator’s direction. When an indicatorpoints up, it is clearly up, and when it is down, it is clearly down.
Switching from manual charting to computerized analysis is like givingup an abacus for a calculator. It may slow you down for a while, as you leamto push the keys, but the eventual increase in speed is worth the effort.
Three Steps to Computerized Analysis
There are three steps to becoming a computerized trader. First you mustchoose software, then a computer, and finally data for analysis. Differentprograms require different computers, which is why it pays to choose soft-ware first. Software tells a computer how to process data and how to displaythe results. Each program has a unique list of features and its own look andfeel.
Draw a list of tasks you want your computer to perform for you and showit to computerized traders. Contact a traders’ group such as Club 3000 to seewhat its members like. Many traders call Financial Trading Seminars, Inc.for our opinion on the best packages. Magazines for traders, such as Futuresand Technical Analysis of Stocks and Commodities carry many ads for tech-nical analysis software. Read those ads and software reviews, and send awayfor demo diskettes.
Once you narrow down your choices to two or three programs, call thecompanies whose software you like and ask for names of users in your area.Insist on names of real users— your best source of practical and unbiasedadvice. Many traders feel isolated and enjoy contact with other traders. Theylike to show their equipment and tell you about the quality of technical sup-port.
Most programs for technical analysis fall into one of three groups: tool-boxes, black boxes, and gray boxes. Toolboxes are for serious traders, blackboxes are for people who believe in Santa Claus, and gray boxes are inbetween. When considering a new package, ask yourself which group itbelongs to.24. COMPUTERS IN TRADING 117Toolboxes
If you want to work with wood or metal, you can go to a hardware store andbuy a toolbox with a set of tools. You must learn how to use those tools towork smarter and more efficiently. A technical analysis toolbox provides aset of electronic tools for processing market data.
A toolbox draws daily and weekly charts, splits the screen into severalwindows, and plots prices and indicators. A good toolbox includes manypopular indicators, such as moving averages, channels, MACD, MACD-Histogram, Stochastic, the Relative Strength Index, and a dozen others. Itallows you to fine-tune ail indicators. For example, it lets you switch from a5-day to a 9-day Stochastic at the push of a button.
A quality package allows you to write your own indicators into the sys-tem. You may have a favorite formula that you want to follow, along withready-made indicators. Avoid programs that limit you to canned indicators.
A good toolbox allows you to compare any two markets and analyzetheir spreads. If you trade options, your toolbox must include an optionsvaluation model. Advanced packages allow you to test the profitability oftrading systems.
There are good toolboxes at all price levels. At the high end, CompuTrac’s™list of indicators runs to two pages, it allows you to test profitability, and it ishighly automated. Most of the charts in this book were drawn using CompuTrac.Financial Trading Seminars, Inc. maintains a list of recommended resources forcomputerized traders — software packages at all price levels, data services, com-puter configurations, and so on. This list is updated every few months andoffered to traders as a public service. You can receive this timely information bycontacting our company at the address that appears in the back of this book.
Black Boxes
Black box software tells you what to buy and sell and when to buy or sell itwithout telling you why. You put data into a black box, lights blink, gearsclick, and out comes a piece of paper telling you what to do. Thousands oftraders pay good money for this.
Most black boxes are sold by hustlers to gullible or insecure traders.Black boxes always come with impressive track records showing profitablepast performance. Every black box self-destructs because markets keepchanging. Even systems with built-in optimization do not work because we118 COMPUTERIZED TECHNICAL ANALYSIS
do not know what kind of optimization will be needed in the future. There isno substitute for mature judgment in trading. 1 The only way to make moneyfrom a black box is to sell one.
Each black box is guaranteed to fail, even if sold by an honest developer.Complex human activities such as trading cannot be automated. Machinescan help but not replace humans.
Trading with a black box means using a slice of someone else’s intelligence,as it existed at some point in the past. Markets change, and experts changetheir minds, but a black box keeps churning out its buy and sell signals.Trading with a black box is like having sex using a penile implant— you maydeceive your partner for a while, but you will never deceive yourself.
Gray Boxes
Like a black box, a gray box generates trading signals based on a proprietaryformula. Unlike a black box, it gives you a general understanding of its for-mula and allows you to fine-tune its operations to some degree. The closer agray box is to a toolbox, the better it is.
Well-known gray boxes include such programs as MESA. It is consideredthe best program for identifying market cycles.
Computers
Different software programs run on different machines. This is why it is bet-ter to choose your software before you buy a computer. Get the most modernmachine, so that it will remain useful for years. Traders keep demandingmore memory and speed —I never heard anyone complain about having toomuch of either. Buy a fast modem for collecting data from a database. Get alaser printer if you need to print high-quality charts.
Most programs allow you to automate studies and print them out. Youpush a button and leave the computer alone. When you return, there is ateam of charts with indicators piled in front of the printer. The tedious workis done, and you can go to work making trading decisions.
It pays to hire a person who already uses the package to set up your sys-tem. I often do that when I start using a new piece of software — it saves a lotof time and energy. Once you know which buttons to push, you can run mostprograms without knowing much about computers.24. COMPUTERS IN TRADING 119Market Data
Each trader needs to start with a historical database and update it daily. In theold days, both had to be created manually. Now historical data for any givenmarket costs less than a dollar per month, and updates are cheap. It takes lessthan a minute to update a dozen markets by modem, using your regularphone line. There are many reliable databases offering a variety of stock,currency, futures, and options data.
Some traders collect their data around the clock. They use satellite dishes,FM receivers, and dedicated phone lines. Real-time data is necessary forday-trading, but not for position trading.
Position traders enter and exit positions within days or weeks. Day-tradersenter and exit trades within a few hours if not minutes. You need to become acompetent position trader before you can day-trade. You can compare positiontrading and day-trading to playing a video game at level one or level nine. Yourun the same mazes and dodge the same monsters, but the pace of the game isso fast that at level nine your reactions must be almost automatic. If you stopto think, you are dead. Learn to analyze the markets and trade at level one—learn to be a position trader before attempting to day-trade.
When you buy historical data, it pays to cover two bull markets and twobear markets. Starting to analyze a new market, I usually review a monthlychartbook covering 20 years of trading to see whether the market is histori-cally high or low. I buy three to five years’ worth of weekly data and oneyear of daily data.
When you begin using a computer, focus on six or fewer markets and addmore later. For example, you may follow Treasury Bonds, Standard & Poor’s500, gold, and Japanese Yen or the German Mark. Change this list if youwant to follow agricultural or industrial markets. Choose a few technicalindicators, and run them daily on each market. After you learn them well,add new ones. I use a battery of 10 or 12 indicators at any given time, plusone new indicator. I watch it for several months and compare its signals toothers. If it proves useful, I add it to the standard package.
Three Major Groups of Indicators
Indicators can help you identify trends and their turning points. They canprovide a deeper insight into the balance of power between bulls and bears.Indicators are more objective than chart patterns.120 COMPUTERIZED TECHNICAL ANALYSIS
The trouble with indicators is that they often contradict one another, Someof them work best in trending markets, others in flat markets. Some are goodat catching turning points, while others are better at following trends.
Most beginners look for a single indicator —a silver bullet to kill the con-fusion in the markets. Others lump together many indicators and try to aver-age their signals. Either way, a careless beginner with a computer is like ateenager with a sports car—an accident waiting to happen. A serious traderneeds to know which indicators work best under different conditions. Beforeyou use any indicator, you must understand what it measures and how itworks. Only then can you have confidence in its signals.
Professionals divide indicators into three groups: trend-following indicators,oscillators, and miscellaneous. Trend-foliowing indicators work best whenmarkets are moving but give bad and dangerous signals when the markets areflat. Oscillators catch tuming points in flat markets but give premature anddangerous signals when the markets begin to trend. Miscellaneous indicatorsprovide special insights into mass psychology. The secret of successful tradingis to combine several indicators from different groups so that their negativefeatures cancel each other out while their positive features remain undisturbed.This is the aim of the Triple Screen trading system (see Section 43).
Trend-following indicators include moving averages, MACD (movingaverage convergence-divergence), MACD-Histogram, the DirectionalSystem, On-Balance Volume, Accumulation/Distribution, and others. Trend-following indicators are coincident or lagging indicators —they turn aftertrends reverse.
Oscillators help identify turning points. They include Stochastic, Rate ofChange, Smoothed Rate of Change, Momentum, the Relative StrengthIndex, Elder-ray, the Force Index, Williams %R, the Commodity ChannelIndex, and others. Oscillators are leading or coincident indicators and oftenturn ahead of prices.
Miscellaneous indicators provide insights into the intensity of bullish orbearish market opinion. They include the New High-New Low Index, thePut-Call Ratio, Bullish Consensus, Commitments of Traders, theAdvance/Decline Index, the Traders’ Index, and so on. They can be leadingor coincident indicators.
25. MOVING AVERAGES
‘Wall Street old-timers claim that moving averages were brought to the finan-cial markets by antiaircraft gunners. They used moving averages to site guns25. MOVING AVERAGES 121
on enemy planes during World War Il and applied this method to prices. Thetwo early experts on moving averages were Richard Donchian and J. M.Hurst—neither apparently a gunner. Donchian was a Merrill Lynchemployee who developed trading methods based on moving averagecrossovers. Hurst was an engineer who applied moving averages to stocks inhis now-classic book, The Profit Magic of Stock Transaction Timing.
A moving average (MA) shows the average value of data in its time win-dow. A 5-day MA shows the average price for the past 5 days, a 20-day MAshows the average price for the past 20 days, and so on. When you connecteach day’s MA values, you create a moving average line.
Py +Po4...4PNN
where P is the price being averagedNis the number of days in the moving average (selected by trader)
Simple MA =
The value of MA depends on two factors: values that are being averaged andthe width of the MA time window. Suppose you want to calculate a 3-day sim-ple moving average of a stock. If it closes at 19, 21, and 20 on three consecutivedays, then a 3-day simple MA of closing prices is 20 (19 + 21 + 20, divided by3). Suppose that on the fourth day the stock closes at 22. It makes its 3-day MArise to 21 —the average of the last three days (21 + 20 + 22), divided by 3.
There are three main types of moving averages: simple, exponential, andweighted. Most traders use simple MAs because they are easy to calculate,and Donchian and Hurst used them in precomputer days. Simple MAs, how-ever, have a fatal flaw — they change twice in response to each price.
Twice as Much Bark
A simple MA changes twice in response to each piece of data. First, itchanges when a new piece of data is added to the moving average. That isgood—we want our MA to reflect changes in prices. The bad thing is thatMA changes again when an old price is dropped off at the end of the movingaverage window. When a high price is dropped, a simple MA ticks down.When a low price is dropped, a simple MA rises. Those changes have noth-ing to do with the current reality of the market.
Imagine that a stock hovers between 80 and 90, and its 10-day simple MAstands at 85 but includes one day when the stock reached 105. When thathigh number is dropped at the end of the 10-day window, the MA dives, as if122 COMPUTERIZED TECHNICAL ANALYSIS
in a downtrend. That meaningless dive has nothing to do with the currentreality of the market.
When an old piece of data gets dropped off, a simple moving averagejumps. A simple MA is like a guard dog that barks twice — once when some-one approaches the house, and once again when someone walks away fromit. You do not know when to believe that dog. Traders use simple MAs out ofinertia. A modern computerized trader is better off using exponential movingaverages.
Market Psychology
Each price is a snapshot of the current mass consensus of value (see Section12). A single price does not tell you whether the crowd is bullish or bear-ish —just as a single photo does not tell you whether a person is an optimistor a pessimist. If, on the other hand, someone brings ten photos of a personto a lab and gets a composite picture, it will reveal that person’s typical fea-tures. If you update a composite photo each day, you can monitor trends inthat person’s mood.
A moving average is a composite photograph of the market —it combinesprices for several days. The market consists of huge crowds, and a movingaverage identifies the direction of mass movement.
The most important message of a moving average is the direction of itsslope. When it rises, it shows that the crowd is becoming more optimistic —bullish. When it falls, it shows that the crowd is becoming more pes-simistic — bearish. When the crowd is more bullish than before, prices riseabove a moving average. When the crowd is more bearish than before, pricesfall below a moving average.
Exponential Moving Averages
An exponential moving average (EMA) is a better trend-following tool thana simple MA. It gives greater weight to the latest data and responds tochanges faster than a simple MA. At the same time, an EMA does not jumpin response to old data. This guard dog has better ears, and it barks onlywhen someone approaches the house.25. MOVING AVERAGES 123
EMA = Pigg * K + EMAyegt * (1K)2N+1N = the number of days in the EMA (chosen by the trader).Pigg = today’s price.
EMA yest = the EMA of yesterday.
where K=
Technical analysis software allows you to select the EMA length and cal-culate it at a push of a key. To do it by hand, follow these steps:
1. Choose the EMA length (see below). Let us say, we want a 10-dayEMA.
2. Calculate the coefficient K for that length (see above). For example, ifyou want a 10-day EMA, K equals 2 divided by 10 + 1, or 0.18.
3. Calculate a simple MA for the first 10 days—add closing prices anddivide the sum by 10.
4. On the 11th day, multiply the closing price by K, multiply the previousday’s MA by (1 — K), and add the two. The result is the 10-day EMA.
5. Keep repeating step 4 on each subsequent day to obtain the latestEMA (see worksheet, Figure 25-1).
An EMA has two major advantages over a simple MA. First, it assignsgreater weight to the last trading day. The latest mood of the crowd is moreimportant. In a 10-day EMA, the last closing price is responsible for 18 per-cent of EMA value, while in a simple MA all days are equal. Second, EMAdoes not drop old data the way a simple MA does. Old data slowly fadesaway, like a mood of the past lingering in a composite photo.
Choosing the Length of a Moving Average
A relatively short EMA is more sensitive to price changes —it allows you tocatch new trends sooner. It also changes its direction more often and producesmore whipsaws. A whipsaw is a rapid reversal of a trading signal. A relativelylong EMA leads to fewer whipsaws but misses turning points by a wider margin.124 COMPUTERIZED TECHNICAL ANALYSIS
 
 
 
 
 
 
1
 
wlolNlaio)ajoln| a!<
 
 
 
 
 
 
 
Figure 25-1. Ten-Day EMA Worksheet
Begin by calculating a simple moving average. The first value in column3 is a simple MA. Then calculate an exponential moving average oneach subsequent day, according to the formula provided in the chapter.
 
When computers first became available, traders crunched numbers to findthe “best” moving averages for different markets. They found which MAsworked in the past—but it did not help them trade because markets keptchanging. Our brokers do not let us trade the past.
It pays to tie EMA length to a cycle if you can find it. A moving averageshould be half the length of the dominant market cycle (see Section 36). Ifyou find a 22-day cycle, use an 11-day moving average. If the cycle is 34days long, then use a 17-day moving average. Trouble is, cycles keep chang-ing their length and disappearing. Some traders use software such as MESAto look for valid cycles, but MESA shows that noise is greater than cycleamplitude most of the time.
Finally, traders can fall back on a simple rule of thumb: The longer the25. MOVING AVERAGES 125
trend you are trying to catch, the longer the moving average you need. Youneed a bigger fishing rod to catch a bigger fish. A 200-day moving averageworks for long-term stock investors who want to ride major trends. Mosttraders can use an EMA between 10 and 20 days. A moving average shouldnot be shorter than 8 days to avoid defeating its purpose as a trend-followingtool. I have been using a 13-day exponential moving average for most of mytrading in the past several years.
Trading Rules
A successful trader does not forecast the future —he monitors the market andmanages his trading position (see Section 17). Moving averages help us totrade in the direction of the trend. The single most important message of amoving average is the direction of its slope. It shows the direction of themarket’s inertia, When an EMA rises, it is best to trade the market from thelong side, and when it falls, it pays to trade from the short side (Figure 25-2).
1. When an EMA rises, trade that market from the long side. Buy whenprices dip near or slightly below the moving average. Once you arelong, place a protective stop below the latest minor low and move thestop to the break-even point as soon as prices close above their EMA.
2. When the EMA falls, trade that market from the short side. Sell shortwhen prices rally toward or slightly above the EMA, and place a pro-tective stop above the latest minor high. Lower that stop to the break-even point as soon as prices close below their EMA.
3. When the EMA goes flat and only wiggles a little, it identifies an aim-less, trendless market. Do not trade using a trend-following method.
Mechanical Systems
The old mechanical trading methods using moving averages usually had foursteps: (1) Buy when the MA rises and prices close above it; (2) sell whenprices close below the MA; (3) sell short when the MA declines and pricesclose below it; (4) cover shorts when prices close above the MA. Thismechanical method works in trending markets but leads to whipsaws whenmarkets go flat.
Trying to filter out whipsaws with mechanical rules is self-defeating — fil-126 COMPUTERIZED TECHNICAL ANALYSIS
Gold13-day EMA
 
 
epFigure 25-2 Thirteen-Day Exponential Moving Average
When the EMA rises, it shows that the trend is up and the market shouldbe traded from the long side. The best time to buy is when prices returnto their EMA-not when they are high above it. Those trades offer a betterrisk/reward ratio.
When the EMA declines, it shows that the trend is down and the mar-ket should be traded from the short side. It is best to sell when pricesrally back to their EMA. When the EMA goes flat, as it did in December,it tells you that the market has stopped trending. Stop using a trend-fol-lowing method but continue to track this indicator, waiting for it to entera trend.
 
ters reduce profits as much as losses. An example of a filter is a rule thatTequires that prices close on the other side of MA not once, but twice, or thatthey penetrate MA by a certain margin. Mechanical filters reduce losses, butthey also diminish the best feature of a moving average —its ability to lockonto a trend early.
The favorite approach of Donchian, one of the originators of trading withmoving averages, was to use crossovers of 4-, 9-, and 18-day MAs. Tradingsignals were given when all three MAs turned in the same direction. His26. MOVING AVERAGE CONVERGENCE-DIVERGENCE 127
method, like other mechanical trading methods, only worked in stronglytrending markets.
A trader must accept that an EMA, like any other trading tool, has goodand bad sides. Moving averages help you identify and follow trends, but theylead to whipsaws in trading ranges. We will look for an answer to thisdilemma in Chapter 9 on the Triple Screen trading system.
More on Moving Averages
Moving averages serve as support and resistance zones. A rising MA tendsto serve as a floor below prices, and a falling MA serves as a ceiling abovethem. That’s why it pays to buy near a rising MA, and sell short near afalling MA.
Moving averages can be applied to indicators as well as prices. Sometraders use a 5-day moving average of volume. When volume falls belowits 5-day MA, it shows reduced public interest in the minor trend, which islikely to reverse. When volume overshoots its MA, it shows strong publicinterest and confirms the price trend.
The proper way to plot a simple moving average is to lag it behind pricesby half its length. For example, a 10-day simple MA properly belongs in themiddle of a 10-day period, and it should be plotted underneath the Sth or 6thday. An exponential moving average is more heavily weighted toward thelatest data, and a 10-day EMA should be plotted underneath the 7th or 8thday. Most software packages allow you to lag a moving average.
Moving averages can be based not only on closing prices but also on themean between the high and the low. MAs of closing prices are used fordaily analysis, but day-traders prefer to apply MAs to median prices.
An exponential moving average assigns greater weight to the latest day oftrading, but a weighted moving average (WMA) allows you to assign anyweight to any day, depending on what you deem important. WMAs are socomplicated that traders are better off using EMAs.
26. MOVING AVERAGE CONVERGENCE-DIVERGENCE (MACD) AND MACD-HISTOGRAM
Moving averages identify trends by filtering out daily price ripples. A moreadvanced indicator was constructed by Gerald Appel, an analyst and money128 COMPUTERIZED TECHNICAL ANALYSIS
manager in New York. Moving Average Convergence-Divergence, orMACD for short, consists not of one, but three exponential moving averages.It appears on the charts as two lines whose crossovers give trading signals.
How to Create MACD
The original MACD indicator consists of two lines: a solid line (called theMACD line) and a dashed line (called the Signal line). The MACD line ismade up of two exponential moving averages (EMAs). It responds tochanges in prices relatively quickly. The Signal line is made up of theMACD line smoothed with another EMA. It responds to changes in pricesmore slowly.
Buy and sell signals are given when the fast MACD line crosses above orbelow the slow Signal line. The MACD indicator is included in most pro-grams for technical analysis. Few traders calculate it by hand—a computerdoes the job faster and more accurately.
To create MACD:
1. Calculate a 12-day EMA of closing prices.2. Calculate a 26-day EMA of closing prices.
3. Subtract the 26-day EMA from the 12-day EMA, and plot their differ-ence as a solid line. This is the fast MACD line.
4. Calculate a 9-day EMA of the fast line, and plot the result as a dashedline. This is the slow Signal line (see the worksheet, Figure 26-1).
Market Psychology
Each price reflects the consensus of value among the mass of market partici-pants at the moment of the trade. A moving average represents an averageconsensus of value in a selected period—a composite photo of mass consen-sus. A long moving average tracks long-term consensus, and a short movingaverage tracks short-term consensus.
Crossovers of the MACD and Signal lines identify shifts in the balance ofpower of bulls and bears. The fast MACD line reflects mass consensus overa shorter period. The slow Signal line reflects mass consensus over a longerperiod. When the fast MACD line rises above the slow Signal line, it shows26. MOVING AVERAGE CONVERGENCE-DIVERGENCE 129
Crude Oil
Close_{ 12-EMA | 26-EMA i MACD : SIGNAL: MACD-Hist2070; 2039 i 2046 E016i P14
 
 
Figure 26-1. MACD and MACD-Histogram Worksheet
To obtain MACD lines and an MACD-Histogram take these steps:
1. Calculate the 12-day and 26-day exponential moving averages ofclosing prices.
2. Subtract the 26-day EMA from the 12-day EMA to obtain the fastMACD line. .
3. Calculate a 9-day EMA of the. fast MACD line to obtain the slowSignal line. Plot both lines to obtain the classic MACD indicator.
4. Subtract the Signal line from the MACD line to obtain an MACD-Histogram.
 
that bulls dominate the market, and it is better to trade from the long side.When the fast line falls below the slow line, it shows that bears dominate themarket and it pays to trade from the short side.
Trading Rules
Crossovers between the MACD and Signal lines identify changing markettides. Trading in the direction of a crossover means going with the flow ofthe market. This system generates fewer trades and whipsaws than amechanical system based on a single moving average.
1. When the fast MACD line crosses above the slow Signal line, it givesa buy signal. Go long, and place a protective stop below the latestminor low.130 COMPUTERIZED TECHNICAL ANALYSIS
et Beltl” ee ye 20.08
Crude Oil
19.6018,3917,180.3836011930.622171.12581.6279
i, ’k , fer”My
Figure 26-2. MACD Lines
When the fast MACD line crosses above the slow Signal line, itgives a buy signal.