$LIT 4 hours: MACD formed a death cross above the zero line, with opposing histogram bars persisting for 15 bars before the crossover.
Let’s use this figure to break down MACD.
A golden cross occurs when DIF crosses above DEA, while a death cross occurs when DIF crosses below DEA; these correspond to the histogram changing from negative to positive and from positive to negative, respectively.
A death cross above the zero line is often seen as a sign that upward momentum is slowing, but it doesn’t necessarily mean the trend has reversed; a death cross below the zero line is more often viewed as a continuation of the downtrend.
The same data can mean very different things in different market conditions, so don’t apply any single rule mechanically.
Let’s use this figure to break down MACD.
A golden cross occurs when DIF crosses above DEA, while a death cross occurs when DIF crosses below DEA; these correspond to the histogram changing from negative to positive and from positive to negative, respectively.
A death cross above the zero line is often seen as a sign that upward momentum is slowing, but it doesn’t necessarily mean the trend has reversed; a death cross below the zero line is more often viewed as a continuation of the downtrend.
The same data can mean very different things in different market conditions, so don’t apply any single rule mechanically.