MACD is a great way to find strong support points.
Especially MACD on bigger time frames (Monthly Chart) because it gives the
trader a very accurate read on strong support points.
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| Monthly Chart |
Here is an Example:
Notice the 4 lines on the chart above. See how at every line
the stock reverses itself, creating a support line.
Now look at the MACD indicator, notice how at every reversal
point the MACD line is below and pointing up at the Exp Moving Average creating
a great signal for support.
This is a great way to find support points to make accurate
and consistence trend lines every time. This can be also used for the
resistance line just do the opposite (MACD line is above and pointing down at the Exp Moving
Average creating a great signal for support).