Daily Divergence MACD Charts

Daily Divergence MACD Charts

 

Daily Divergences are easy to locate compared to real time divergences. All that is required is for the short term time frames to get out of the way.

What is the best lower time frame for a daily chart? The next lower time frame is best and it is the hourly. Compared with the even lower time frames the hourly gives a better bang for the buck and is less labour intensive. The hourly will run farther and longer.

 

USO Positive Divergence

 

Daily USO Chart Sep

USO Daily Positive Divergence

 

Daily USO Divergence where the first bottom was made in August and the 3rd bottom was made 5 trading days ago.  So, this is not a surprise pattern.

 

Daily USO Chart 4 min

USO 4 min Chart

 

The USO opened down in the morning of 9/29. And we have established there is a Daily Positive Divergence. Now all that is required for a Buy signal is for the lower time frames to get out of the way and turn up. The red Up arrow indicates where to buy. The MACD turned up and the price jumped over the moving averages. In order to get out USO created a negative divergence around 14:00 near the red down arrow and the share price crossed below the moving averages.

 

Daily USO hourly chart

USO Hourly Chart

 

As we  already know the Daily chart shows a Positive Divergence and all you need to enter(red Up arrows) is for the MACD to turn up. In addition to add confidence to the trade there are some Positive Divergences on the hourly chart.  The length between the bottoms foreshadows where to expect the next target. Just compare A 21 bars with AA 21 bars and B 38 bars with BB 38 bars.

 

 

 

 

 

VXX Positive Divergence

 

Daily VXX Chart Sep

Daily VXX Chart with Divergence

 

Daily VXX chart that has been building a divergence as far back as June where the MACD bottomed. After that the share price has bottomed near points 10 and 2 while the MACD continued to increase. The horizontal purple lines show the Positive Divergence and the slanted purple lines indicate the targeted share price. Right now the targeted price is clearly above the current price.

 

Daily VXX Chart 4 min

VXX 4 min Chart

 

In order for the VXX to move up based on the Positive Divergence the shorter time frame needs to get out of the way. After an initial rally on Sep 29 a pullback followed till about 12:00. The red Up arrow gives a good entry point and the down arrow for the exit. The exit also made a negative divergence to allow us to recognize another pullback is up.

 

UNG Positive Divergence

 

Daily UNG Chart Sep

Daily UNG Chart with Positive Divergence

After about two months of bottoming the UNG chart shows a Positive Divergence between the MACD and the share price. Somehow coinciding with the heating season starting.  Once the shorter time frames give way the daily divergence can push up the prices.

 

Daily UNG 6 min Chart

UNG 6 min Chart

 

On Sep 30 there was no clear entry. You could have entered between 10:00 and 11:00 or on the pullback around 13:00. With an exit right after 14:00 when the up move seems to have stalled.

 

Daily UNG hourly chart

UNG Hourly Chart

 

Again a daily Positive Divergence exists, so all that is needed to enter(red Up arrows) is for the MACD to turn up. The horizontal purple lines show some Positive Divergences to add confidence to the trades, but are not a requirement. The space between the bottoms give an indication of how long you can expect the rally to last. Compare A 28 bars with AA 28 bars and B 45 bars with BB 45 bars.  BB 45 bars might indicate UNG is ready for a pullback on Oct 1.

 

 

 

 

Author: tedvanderende

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