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MACD crosses above centerline and stays near to the centerline without crossing below centerline. This pattern is important as the MACD moves above the zero line and into positive territory. This is a clear indication that momentum has changed from negative to positive, or from bearish to bullish. However, the MACD stays near the centerline for a period of consolidation before thrusting upward.
Caution to be taken when applying this strategy:
1. Never use a technical signal alone without other indicators. MACD is a powerful indicators, but it should be applied together with other indicators, chart reading, fundamental strength and trendlines.