Detecting a Fade in Downside Momentum

Arthur Hill
by Arthur Hill,
Chief Technical Strategist, TrendInvestorPro.com

Positive divergences in MACD show waning downside momentum that can lead to a breakout. DR Horton (DHI) forged a lower low in early July, but MACD held above its June low for a positive divergence. Despite a lower low in the stock, downside momentum was fading. MACD's subsequent move above its signal line preceded a resistance breakout in DHI. Note: This is an educational post featuring a technical analysis technique.

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Arthur Hill
About The Author:

Arthur is Chief Technical Strategist at TrendInvestorPro.com. Focused primarily on US equities and ETFs, his systematic approach of identifying trend, finding signals within and setting key price levels has made him an industry-leading technician. Learn More 

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