Pressure’s On But Keep Focus – MACD False Signals, Moses’ Stock Column

August 19, 2014

 

Pressure’s On But Keep Focus – MACD False Signals, Moses’ Stock Column

 

Welcome to Moses’ Stock Column at AmiBrokerAcademy.com.  Thank you for visiting the site. One of the reasons you are here because you want to know who moves your stock.

 

Lesson

Pressure’s On But Keep Focus– MACD False Signals

 

Forecasting algorithm can fail, like weather forecast on typhoon or thunderstorm do not happen are common. Same goes to indicators, such as MACD can generate false signals too.

 

A false MACD positive signal, a bullish crossover followed by a sudden decline in a stock price. Or a false MACD negative signal can happen to fail during a bearish situation and resulting in bullish too, where there was no bullish crossover but the stock accelerated upwards.

 

To counter the problem, the strategy is to apply filter. Example on the MACD signal crossovers to ensure that price action continues to hold up. An example of a price action filter would be to buy if the MACD line breaks above the signal line and remains above. Just like any filtering strategy, this only reduces the probability of false signals but equally this resulting you will miss the profitable trade too.

 

So the pressure is on, but keeps focus. It is better to reduce risk, than expose to loses. It is wise to wait for confirmation before taking any trade. Technical analysis uses a variety of approaches to filter out as many false signals as possible and confirm the true ones.

 

In MACD, a MACD crossover signals indicate that the direction of the acceleration is changing. When MACD line crossing zero level suggests that the average velocity is changing direction.

 

Stay focus, trade reasonable and manage your risk.So don’t play play. Do your home work and trade responsibly.  

 

 

Moses’ Free MACD Scan

 

This site provides you the free MACD scan for Singapore stocks.

This is August 11, 2014, Monday of the nine hundreds plus Singapore stocks that have the following MACD signals, which have trading volume greater than 500,000 shares.

Total 59 stocks have MACD bullish and bearish signals, 40 stocks have bullish MACD signals, and 19 stocks have bearish MACD signals.

 

Only 30 stocks are traded more than 500,000 shares.  20 stocks have bullish MACD signals, and 10 stocks have bearish MACD signals. Wow! The bulls have left the town.

1. MACD line crosses above MACD signal – Bullish trend
2. MACD line crosses above zero line – Bullish trend
3. MACD Histogram +ve Divergence – Bullish trend
4. MACD line crosses below MACD signal – Bearish trend
5. MACD line crosses below zero line – Bearish trend
6. MACD Histogram -ve Divergence – Bearish trend
7. Volume traded greater 500,000 shares

 

Ticker	Company	Signals	Close	Vol.(K)	Screening Result
C68	MIRACH ENERGY LIMITED	Bullish	0.195	98840	MACD Cross-Up Signal
5UN	SINCAP GROUP LIMITED	Bullish	0.125	29834	MACD Cross-Up Signal
N4E	NAM CHEONG LIMITED	Bullish	0.495	23945	MACD Cross-Up Signal
EG0	JES INTERNATIONAL HOLDINGS LTD	Bullish	0.063	13952	MACD-H +ve Divergence
542	GIKEN SAKATA (S) LIMITED	Bullish	0.35	8453	MACD Cross-Up Signal
J16	GSH CORPORATION LIMITED	Bullish	0.077	8247	MACD Cross-Up Signal
RE4	GEO ENERGY RESOURCES LIMITED	Bullish	0.27	3975	MACD-H +ve Divergence
5CQ	TECHNICS OIL & GAS LIMITED	Bullish	0.835	2526	MACD Cross-Up Signal
Z59	YOMA STRATEGIC HOLDINGS LTD	Bullish	0.67	2127	MACD +ve Divergence
5UO	SYSMA HOLDINGS LIMITED	Bullish	0.255	1990	MACD Cross-Up ZeroLine
MS7	VARD HOLDINGS LIMITED	Bullish	1.005	1720	MACD-H +ve Divergence
526	HG METAL MANUFACTURING LTD	Bullish	0.076	1415	MACD +ve Divergence
H78	HONGKONG LAND HOLDINGS LIMITED	Bullish	6.89	1085	MACD Cross-Up Signal
C14	CWT LIMITED	Bullish	1.71	1011	MACD Cross-Up Signal
AK3	SWIBER HOLDINGS LIMITED	Bullish	0.49	889	MACD-H +ve Divergence
S63	SINGAPORE TECH ENGINEERING LTD	Bullish	3.8	866	MACD Cross-Up Signal
A7RU	CITYSPRING INFRASTRUCT TRUST	Bullish	0.51	747	MACD Cross-Up Signal
J7X	TIGER AIRWAYS HOLDINGS LIMITED	Bullish	0.41	712	MACD-H +ve Divergence
MF6	MUN SIONG ENGINEERING LIMITED	Bullish	0.122	680	MACD Cross-Up ZeroLine
KI3	HU AN CABLE HOLDINGS LTD.	Bullish	0.068	528	MACD-H +ve Divergence
Y92	THAI BEVERAGE PUBLIC CO LTD	Bearish	0.63	17578	MACD -ve Divergence
S10	SUPER GROUP LTD..	Bearish	1.445	3982	MACD Cross-Down ZeroLine
CH8	CHINA SUNSINE CHEM HLDGS LTD.	Bearish	0.32	3130	MACD Cross-Down Signal
F34	WILMAR INTERNATIONAL LIMITED	Bearish	3.22	2097	MACD Cross-Down ZeroLine
E3B	WEE HUR HOLDINGS LTD.	Bearish	0.39	1706	MACD Cross-Down ZeroLine
SK7	OUE HOSPITALITY TRUST	Bearish	0.895	1404	MACD Cross-Down ZeroLine
T39	SINGAPORE PRESS HLDGS LTD	Bearish	4.13	1398	MACD Cross-Down Signal
N03	NEPTUNE ORIENT LINES LIMITED	Bearish	0.94	1135	MACD Cross-Down Signal
B1ZU	RICKMERS MARITIME	Bearish	0.295	1011	MACD Cross-Down Signal
KJ5	BBR HOLDINGS (S) LTD	Bearish	0.29	803	MACD -ve Divergence

 

 

Straits Times Index

August 11, 2014, Monday Straits Times Index, STI gaps up and closes at 3306.45 points. STI is up 17.56 points from the last Friday closed at 3288.89 points.

Can the 3280 level a strong level to hold the falling knife? Will this the pivot in changing the direction? Will see.

 Catching a falling knife is an act of trying to predict where a price action or index will stop decline and start reversal.

 

 

 

 

 

Thanks for visiting the site, AmiBrokerAcademy.com.

Moses

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