# Glossary of Technical Analysis Terms: M

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This article is from the Glossary of
Technical Analysis Terms.

# Glossary of Technical Analysis Terms: M

**MACD (Moving Average Convergence/Divergence)**:

The MACD is used to determine overbought or oversold conditions in
the market. Written
for stocks and stock indices, MACD can be used for commodities as
well. The MACD line is the difference between the long and short
exponential moving averages of the chosen item. The signal line
is an exponential moving average of the MACD line. Signals are
generated by the relationship of the two lines. As with RSI and
Stochastics, divergences between the MACD and prices may indicate
an upcoming trend reversal.

**McClellan Oscillator**:

This index is based on New York Stock Exchange net advances over
declines. It provides
a measure of such conditions as overbought/oversold and market
direction on a short-to- intermediateterm basis. The McClellan
Oscillator measures a bear market selling climax when it registers
a very negative reading in the vicinity of -150. A sharp buying
pulse in the market would be indicated by a very positive reading,
well above 100.

**Momentum**:

Momentum provides an analysis of changes in prices (as opposed to
changes in price
levels). Changes in the rate of ascent or descent are plotted. The
Momentum line is graphed positive or negative to a straight line
representing time. The position of the time- line is determined by
price at the beginning of the Momentum period. Traders use this
analysis to determine overbought and oversold conditions. When a
maximum positive point is reached, the market is said to be
overbought and a downward reaction is imminent. When a maximum
negative point is reached, the market is said to be oversold and
an upward reaction is indicated.

**Moving Averages**:

The moving average is probably the best known, and most versatile,
indicator in the
analysts tool chest. It can be used with the price of your choice
(highs, closes or whatever) and can also be applied to other
indicators, helping to smooth out volatility. As the name
implies, the Moving Average is the average of a given amount of
data. For example, a 14 day average of closing prices is
calculated by adding the last 14 closes and dividing by 14. The
result is noted on a chart. The next day the same calculations are
performed with the new result being connected (using a solid or
dotted line) to yesterday's. And so forth. Variations of the basic
Moving Average are the Weighted and Exponential moving
averages.

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