Before coming up with this idea I asked myself the following question: is there a way to visualize whether sellers or buyers are in control during a certain move/period of stock price action?
In order to achieve this, I decided to connect the moves with the associated changes on the MACD histogram bars and try to plot the "area's" on the Histogram bars as a form of "accumulative momentum".
With BABA, it can be seen seen that a "change of character" has occurred since march of 2022 where for the first time the area above the 0 line between the histogram bars became larger than the area below it. Is this further evidence that the stock has been in accumulation mode ever since? Time will tell!
I like your thinking here re: creating a visual representation of the momentum data to better gauge which direction momentum is headed.
More than that, I like and have been thinking a lot lately about creating 2nd level indicators off of standard tools like MACD or RSI (or in other words. derivatives of those tools), to gain more meaningful insights about what the data is telling us.
A good example of this is RSI/MACD Divergences, which are far more valuable than an indicators absolute reading (like RSI = 55) on its own.
I'm going to spend more time thinking about this and shoot you a message when I have some ideas. If you're interested maybe we can do some brainstorming and back testing to confirm which ideas are consistent/reliable signals.
Thanks for sharing this!
Cheers
NQunlocked
⋅
@Livinontheflipside, Would love to bro, this type of work is exactly where my passion lies for TA, let’s collaborate and maybe we can automate the process I am highlighting here so we can do robust backtesting!
NQunlocked
⋅
If you know of a way to accurately calculate the area's above and below the 0 lines (based on pre selection of specific swing high/low) don't hesitate to reach out!
More than that, I like and have been thinking a lot lately about creating 2nd level indicators off of standard tools like MACD or RSI (or in other words. derivatives of those tools), to gain more meaningful insights about what the data is telling us.
A good example of this is RSI/MACD Divergences, which are far more valuable than an indicators absolute reading (like RSI = 55) on its own.
I'm going to spend more time thinking about this and shoot you a message when I have some ideas. If you're interested maybe we can do some brainstorming and back testing to confirm which ideas are consistent/reliable signals.
Thanks for sharing this!
Cheers