An Application of Moving Average Convergence and Divergence (MACD) Indicator on Selected Stocks Listed on Bombay Stock Exchange (BSE)

Technical Analysis is widely used by traders for trading decisions in the stock market especially intraday trading. Various technical indicators like the moving averages or momentum indicators assist the traders in decision making. One such trend indicator is the Moving Average Convergence and Divergence (MACD) indicator. This paper analyses the profit or loss generated on application of this indicator on selected five stocks from the Bombay Stock Exchange (BSE). It has been observed after application on a daily basis for over a year that all the decisions based on MACD have generated a profit. Certain precautionary measures have also been suggested for successful implementation of the indicator.