WEBVTT 00:01.670 --> 00:06.470 Hi everyone and welcome back to this wealthy education technical analysis course today we're going to 00:06.470 --> 00:14.720 be talking about the moving average convergence divergence or the Mac the the Mac D is a type of exponential 00:14.720 --> 00:23.280 moving average it subtracts the 12 day exponential moving average from the 26 day exponential moving 00:23.280 --> 00:30.960 average to get one line which is the Mac the line and then it combines this with a nine day exponential 00:30.960 --> 00:40.260 moving average as well as a zero line that the McIntee and the nine day IIM-A can cross above and below 00:40.560 --> 00:44.620 a cross by the Mac D above the nine day line. 00:44.640 --> 00:53.670 As bullish and a cross by the Mac the below the nine day line is Barish across above the zero line is 00:53.690 --> 01:02.150 Balazs and across below the zero line is Barish the crossing the zero line is less important than the 01:02.150 --> 01:04.690 Mac the crossing the nine day line. 01:04.820 --> 01:13.550 When the stock price moves higher as the McIntee moves lower we have a divergence and this is a negative 01:13.700 --> 01:15.040 divergence. 01:15.320 --> 01:22.550 When the stock price is moving lower and the Mac D is moving higher then we have a positive divergence 01:23.150 --> 01:30.500 a negative divergence tells us that the stock may cease to move higher and either turn down or move 01:30.500 --> 01:38.850 into a consolidation pattern and a positive divergence tells us that the stock may cease to move lower 01:39.360 --> 01:46.680 and move into a consolidation pattern or possibly move higher Cross and the Mac the often indicates 01:46.680 --> 01:55.950 a trend change especially if the Mac D is in a bullish position well above the zero line and then crosses 01:56.040 --> 01:59.510 the nine day to the downside. 01:59.520 --> 02:03.310 This may indicate that a bullish trend is becoming bearish. 02:03.860 --> 02:06.420 And just the opposite in a bearish trend. 02:06.570 --> 02:14.340 If the Mac D is extremely oversold and the Mac then crosses the nine day to the upside. 02:14.340 --> 02:21.870 This may indicate that the bearish trend is turning bullish or at a minimum turning into a consolidation 02:21.870 --> 02:22.600 pattern. 02:22.920 --> 02:27.130 So let's take a look at the mac daddy on a chart. 02:27.170 --> 02:35.160 Let's use a chart of ExxonMobil exo elm on a daily basis to look at them acting sort wanting to click 02:35.160 --> 02:44.760 on indicators type pen or a CD for them at the click the MAC DE close this box and then we have the 02:44.760 --> 02:46.860 Mac D at the bottom of the screen. 02:46.860 --> 02:55.050 The center line is the zero line for the Mac D and the blue line is the Mac D line and the red line 02:56.140 --> 02:59.120 is our 9 period DMA. 02:59.410 --> 03:05.690 Let's start at the beginning of the chart we have the Mac and the in bullish territory but the zero 03:05.690 --> 03:07.370 line trending up. 03:07.620 --> 03:10.100 And then we get a cross of the Mac the 03:12.890 --> 03:18.240 here actually before the stock dropped off. 03:18.260 --> 03:25.770 So we had a cross of the Mac D which is in overbought territory at this point to the downside. 03:25.770 --> 03:28.060 And then the stock drops. 03:28.080 --> 03:35.820 So with this cross we may have sold our position or at a minimum tightened our stops and been prepared 03:35.820 --> 03:43.130 for a reversal in trend from a bull trend to at a minimum a consolidation pattern. 03:43.130 --> 03:48.720 But the stock actually went into a bear trend. 03:48.950 --> 03:54.410 The Mac the drops along with the stock and then we get another crossover of the Mac the 03:57.620 --> 04:02.290 and this is a bullish cross of our blue Mac. 04:02.290 --> 04:04.980 The line above the red nine day line. 04:05.230 --> 04:09.740 We get a short rally in the stock but then the stock continues down. 04:11.610 --> 04:19.610 Here as the Mac the continues up. 04:19.700 --> 04:22.060 So this is a bullish divergence in the math. 04:22.070 --> 04:29.300 The we have the price of the stock dropping the price of ExxonMobil dropping and the Mac the rising. 04:29.300 --> 04:34.940 So this should tell us if we're short the stock to tighten our stops. 04:35.990 --> 04:41.280 And possibly look for an exit of our short and prepare to go long. 04:41.600 --> 04:47.360 The Macchi crosses the zero line which is bullish the stock moves up. 04:47.380 --> 04:51.610 We then have the McIntee continuing in bullish territory. 04:51.610 --> 04:55.450 It's above the zero line across here. 04:57.080 --> 05:01.160 Back below the zero line. 05:01.410 --> 05:09.210 The stock continued to move up as the Mac was in bullish territory and as the Mac moved below zero where 05:09.210 --> 05:14.420 the stock coming back down and breaking the support level 05:17.730 --> 05:20.680 then we having another buy signal and the Mac the 05:23.920 --> 05:30.000 which is an oversold but not an extreme oversold position as it was back in February. 05:31.870 --> 05:39.460 So with this buy signal if we have taken a short position here we'd be ready to exit that position. 05:41.200 --> 05:43.310 And perhaps ready to go long. 05:44.310 --> 05:52.340 And the stock had almost touched a major support level here dating back to May. 05:52.440 --> 05:59.170 So I have a major support level combined with a buy signal in the Mac the which again would have us 05:59.200 --> 06:05.710 exiting our short position and possibly taking a long position to be confirmed by crossing the zero 06:05.710 --> 06:11.930 line and early September and the stock continued up from the 80 dollar level. 06:13.260 --> 06:25.180 Around the $87 level we had another cell signal on our Mac the which was overbought at this point. 06:25.300 --> 06:33.670 So this cell signal would have told us to tighten up our stops and then we see the stock fall off again. 06:33.670 --> 06:36.660 And now we're in a buy signal in the Mac right now. 06:38.210 --> 06:44.340 So that's the McIntee combined with support air resistance and the stock of ExxonMobil. 06:44.720 --> 06:50.420 Thank you for watching this video on the Mac D or the moving average convergence divergence indicator. 06:50.630 --> 06:56.090 And our next video we're on to talk about the relative strength index I look forward to seeing you in 06:56.090 --> 06:56.670 the next video.