McClellan Histogram Stock Analysis & McClellan Histogram Trading Signals

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

This is an oscillator indicator, the center line is the zero crossover mark which is used to generate buy and sell stock signals.

McClellan Histogram

Stocks Trading Analysis & Generating Trading 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 stock signals.

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

Technical Analysis in Stocks Trading

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

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

Stock Trend Reversal Signals - Classic Divergence Signals

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

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

Stock Trend Continuation Signals - Hidden Divergence Signal

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

• Stock 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