OPEN-SOURCE SCRIPT

Awesome Oscillator and MACD Histogram

This is a quick script that combines two standard indicators, the Awesome Oscillator and MACD histogram, to highlight the beginnings of periods of fast price movement (divergence between the two). Since MACD's EMA responds more quickly than AO's SMA, look for periods of green over gold as a bullish signal, and red under blue as a bearish signal.

Of course both indicators are lagging in nature, but the presence of this divergence often leads larger, continued movement in the same direction.

Bullish Signals
  • Change from red to green below 0 with either blue or gold above 0 (strengthened on second green bar):
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  • Rising green above 0 with gold below 0:
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Bearish Signals
  • Change from green to red above 0 with either blue or gold below 0 (strengthened on second red bar):
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  • Deepening red below 0 with blue above 0:
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