MACI (MA Convergence)

Creator: Definedge

The Moving Average Convergence Indicator (MACI) measures the convergence of moving averages.

6-user defined moving averages are considered for calculating whether these averages are in convergence. When the stock is in consolidation mode and when the averages are close to each other, the breakout from a tight consolidation would typically be an opportunity to participate in the next uptrend when a stock forms a significant low. In the same way, stocks that form convergence after reaching an important high can be considered bearish.

This study can help you identify stocks in tight consolidation. The default moving average periods are 5,10,20,50,100, and 200. It is possible for the user to modify them according to their preferences. This indicator is also very effective on the noiseless charts.

The red dot on the chart indicates strong convergence between the moving averages and hence significant consolidation. The green dot in the indicator indicates that the averages are spread apart, indicating that there is a strong trend and momentum.

The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.

The indicator is applicable to all types of charting. Calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.

This indicator is also available in the System Builder of RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.