Hi friends,We meet again here in this forum....:)We'll discuss...

Hi friends,

We meet again here in this forum....:)

We'll discuss the cash index - All Ordinaries or the XAO and the technical indicator MACD to know when it will display a positive crossover to indicate a rebound. Normal classical technical analysis stuff, nothing extraordinary... but useful:)

One of the classical technical indicators used is the Macd where traders like to see a positive crossover of the macd of the cash index XAO as an indication that the market has turned positive, namely, turned uptrend from a downtrend position. You can see this as shown by the pink arrows in the chart of the XAO below.

Therefore it is useful to compute and chart the values of the XAO that the index has to crossover to the upside in order to trigger the Macd to display the positive crossover signal.

When there are substantial announcements or events of a fundamental nature that might affect the markets eg budget announcements by the Treasurer, watching the index moves and to see whether it triggers the positive crossover may provide opportunities for short term entries into targeted stocks at the moment the macd of the XAO (representing the entire market) turns positive.

What value will the macd of the XAO generates a positive crossover tomorrow?

As shown in the chart below, the macd is computed to display a positive crossover if the XAO index manages to stay above 4827.94 at the close of trading ( ie. stays above the white indicator line shown in the candlestick price chart). Otherwise, there is no positive crossover if it stays below this value.



Let's just watch and see whether the XAO crosses above or below 4827.94 tomorrow at the close to allow the macd to have a positive crossover or to remain locked in negative territory.

Have a great trading day.

dascore