This set up usually best after a steep decline or a strong run up. The main thing to look for is DIVERGENCE. You can use other momentum indicators to spot divergence. Here I've used a slower momentum TRIX and a faster momentum StochRsi. When averages are too far apart that is also is a sign that price has gone too far away from the mean so it often signifies overbought or oversold conditions,when they squeeze tightly together it signifies indecision (flat market).