McClellan Histogram Stocks Analysis & McClellan Histogram Stocks Signals

The McClellan Histogram is a graphical representation of the McClellan Oscillator & its signal line. This difference between the 2 is drawn as a histogram.

This is an oscillator, the center-line is the zero cross over mark which is used to generate buy and sell signals.

McClellan Histogram

Stock Technical Analysis and Generating Stocks Signals

The Histogram is momentum indicator. Signals are generated using the center line cross over technique.

• Bullish signal- Above Zero
• Bearish Signal - Below Zero

There are two fundamental techniques for using this indicator to generate stocks signals.

Zero-Level Crossover- When the histogram crosses above zero a buy signal is generated. Otherwise, when the histogram oscillator crosses below zero a sell stocks trade signal is generated.

Analysis in Stocks Trading

Divergence Stock - divergence trading between this indicator and the stocks price chart can prove to be very effective stock strategy in spotting potential stocks trend reversal signals and stocks trend continuation signals.

There are several types of Stock Trade Divergence Stocks Trade Signals:

Stocks Trend Reversal Stocks Signals - Classic Divergence Signals

• Stocks Classic Bullish Divergence Signals - Lower lows on stocks price chart and higher lows in the McClellan Histogram

• Stocks Classic Bearish Divergence Signals - Higher highs on stocks price chart and lower highs in the McClellan Histogram

Stocks Trend Continuation Signals - Hidden Divergence Signal

• Stocks Hidden Bullish Divergence Signals- Lower lows in McClellan Histogram and higher lows in stocks price chart

• Stocks Hidden Bearish Divergence Signals- Higher highs in McClellan Histogram and lower highs in stocks price chart

To Learn more about divergence go to the divergence trading topic on this site