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Interpretation of two MACD histograms
I am trying to interpret the meaning of the following two scenarios comparing a faster MACD (3,10,16) versus the standard MACD (12,26,9):
1) Faster MACD just crossed upward above the zero line and the standard MACD is already hovering above the zero line
2) Faster MACD just crossed upward above the zero line , however the standard MACD is slowly rising, but below the zero line.
Comparing these two charts, what is it telling me and which one is more powerful ?
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Comments
However, there are other factors to consider. Where is the positive MACD stock in it's cycle? If it is early in the mark up phase (see the Wyckoff article in Chart School), the analysis holds. But if it's later in the mark up phase, or somewhere in the distribution phase, - in other words, if you have seen high volume, long body down bars, or high volume up bars that don't make new highs, or with compressed range or long wicks, or the stock makes new highs on much lower volume, be more careful.
Conversely, if the negative MACD stock has been in a long down trend and bottomed out - in other words, if it has gone through an accumulation phase, during which at least a few strong volume bars have not produced new low prices, or if new low prices were on bars with long tails, or much lower volume versus previous new low prices, then the stock may be about to emerge into the mark up phase and could be a very good bet.