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What is the Difference Between MACD and the PPO
[Stocks Technical Analysis] TradingReview360.com: We endeavour to bring you the very latest from around the globe. The article below is useful for those interested in Stock Charts.
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MACD and the Percent Price Oscillator (PPO) are momentum oscillators that measure the difference between two moving averages. MACD(12,26,9) is the absolute difference between the 12-day and 26-day exponential moving averages. PPO(12,26,9) takes MACD one step further by showing the percentage difference between these two moving averages. The PPO is the difference of the two EMAs divided by the 26-day EMA. A 9-day EMA is applied to MACD and the PPO to act as a signal line. ??
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The difference between MACD and the PPO can be seen on the Dow chart. Notice that MACD values are influenced by the price of the underlying security. The higher the prices are, the larger the MACD values, both positive and negative. MACD for the Dow fluctuated between +150 and -200. Basically, the PPO values are the MACD values divided by the 26-day EMA. The PPO fluctuated between +1.1% and -1.6%. You can read more on MACD and the PPO in our ChartSchool.
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What Is Technical Analysis?
Technical Analysis is the forecasting of future financial cost movements based upon an evaluation of past cost motions. Like weather forecasting, technical analysis does not lead to downright forecasts about the future. Instead, technical analysis can assist traders anticipate just what is likely to occur to stocks over time.
Technical analysis makes use of a wide variety of charts that reveal cost over time.