McClellan Oscillator Stocks Technical Analysis & McClellan Oscillator Stocks Signals

Developed by McClellan.

The McClellan Oscillator is an indicator that is based on smoothing the difference between the number of bullish candles and bearish candles. This stocks technical indicator looks similar to the traditional MACD.

McClellan Oscillator

Stock Technical Analysis and How to Generate Signals

This Oscillator is a momentum indicator that can be traded in the same way as the MACD indicator. There are 3 techniques that McClellan Oscillator can be used to generate stocks signals.

Zero Center Line Crossover Signals:

Bullish Signals- When the oscillator crosses above the zero center-line a buy signal is given.

Bearish Signals- When the oscillator crosses below zero center-line a sell signal is given.

Technical Analysis in Stock Trading

Divergence Stocks Signals:

Looking for divergences between the McClellan Oscillator and stocks price can prove to be very effective in spotting the potential reversal and/or trend continuation points in stocks price movement.

There are several types of divergences:

Classic Stocks Trading Divergence ( Regular Stocks Trading Divergence )

• Bullish Divergence: Lower lows in stocks price action and higher lows in the McClellan Oscillator.

• Bearish Divergence: Higher highs in stocks price and lower highs in the McClellan Oscillator.

Hidden Stocks Trading Divergence Setup

• Bullish Divergence: Higher lows in stocks price action and lower lows in McClellan Oscillator.

• Bearish Divergence: Lower highs in stocks price action and higher highs in McClellan Oscillator.

Oversold/Overbought Levels on Technical Indicator

The McClellan Oscillator is also used to identify potential overbought and oversold levels in stocks price action movements. The overbought and oversold conditions are generated when the oscillator moves to extreme levels on one side and starts to turn, however, in a strong trending market the oscillator will stay in the overbought and oversold levels for a long time. It is not recommended to trade overbought and oversold levels to generate stock signals. Best signal to use is the Center-line cross-over signals to generate stocks signals.