Using Indicators for Optimal Forecasting

Trend Identification with Moving Averages:

Long-Term Trend:

Use the 200-day Simple Moving Average (SMA). If the price is above the SMA200, it indicates a long-term uptrend; if below, it indicates a downtrend.

Short-Term Trend:

Use the 50-day SMA. If the price is above the SMA50, it indicates a short-term uptrend; if below, it indicates a downtrend.

Crossovers:

A Golden Cross, where the SMA50 crosses above the SMA200, signals a strong buy. Conversely, a Death Cross, where the SMA50 crosses below the SMA200, signals a sell.

Evaluating Momentum and Trend Strength with MACD:

Buy Signal:

When the MACD line crosses above the signal line, it indicates a potential buy.

Sell Signal:

When the MACD line crosses below the signal line, it suggests a potential sell.

MACD Histogram:

A positive histogram indicates upward momentum, while a negative histogram indicates downward momentum. This helps in understanding the strength and direction of the trend.