The thought just occurred to me that somebody picking up on the...

The thought just  occurred to me that somebody picking up on the bullish indication/s demonstrated in the preceding chart might concude that it is some some of buy signal - it was not intended to be the case, it is simply demonstrating that there are a couple of signals suggesting there could be an early but unconfirmed warning of a pending change. Possibly leading to a bottom forming but too early to tell.

Although there is a daily indication of some bullish potential there are still bearish indications, although waning, when looking at a weekly timeframe. I prefer to see both timeframes in overall sync and even if it is confirmed as bullish in a daily sense I woud prefer to see at least early indications of bullishness (green bar) in a weekly sense before I would personally get too excited.

That is where MACD can be really useful because it is very sensitive and detects quite early changes in momentum over any timeframe. i.e a slowing in bearish momentum can be detected when the histogram turns up from below the centre line. In the case of AJX one can see that the daily histogram has detected that the strength of the current bearish leg is waning  - good. However the weekly is still signalling a bearish phase although slowing (red bars).

The attached chart shows this with both the weekly (upper) and daily (lower) MACD histograms on a daily chart. A lot of activity on daily charts is not much more than noise and it is easy to get caught up in the heat of the moment only to find a move peters out in a couple of days. Using multiple timeframes can be useful in filtering out some of the noise. It may delay decisions by a few days but can also lead to fewer regrets in the long run.

Hope you find this useful.....

Daily - with both daily and weekly MACD histogram