For some time now I have been posting on my Chart of the Day which Barchart technical trading strategy has worked best on the individual stocks and one indicator that has been repeated more than any other is the 50-100 Day MACD Oscillator.

Barchart defines the 50-100 Day MACD Oscillator as:

The MACD Oscillator is the difference between a short-term and a long-term moving averages.

The three parameters are the number of periods for the short-term moving average, long-term moving average and the moving average of the resulting MACD Oscillator.

This shows the convergence and divergence of the two moving averages and is plotted as the red line around the zero point. The MACD is presented with its moving average as the green line. The MACD oscillator is available in the Custom Charts section of our site.

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If you put a zero in the third parameter box, the program will not calculate the moving average of the MACD and only the red line will appear, and the resulting MACD is conventionally presented as a histogram for clarity.

When the MACD Oscillator is above the zero line, conventional wisdom interprets this as a bullish signal, and conversely, when the histogram is below the zero line this is interpreted as a bearish signal. The red line being above the green line reinforces a bullish signal, and the red line below the green line reinforces a bearish signal. Other interpretations use crossovers between the red and green lines as market timing signals if the resulting direction of both lines is the same. Going up is bullish, going down is bearish.

Sounds complicated but Barchart does the work for you and all you have to do is look at the Opinion Trading Strategy Performances for the Dow Jones Industrial Averages: