(1) top deviation
When the trend of the stock is higher than that of the stock on the K-line chart, the stock price has been rising, while the trend of the graph composed of red columns on the MACD indicator chart is lower than the previous peak, that is, when the high point of the stock price is higher than the previous high point and the high point of the MACD indicator is lower than the previous high point, this is the so-called top deviation phenomenon. Top deviation is generally a signal that the stock price is about to reverse at a high level, indicating that the stock price is about to fall in the short term, which is a signal to sell stocks.
(2) Bottom deviation
Bottom deviation generally appears in the low area of stock price. When the stock price is running on the K-line chart, the stock price is still falling, and the trend of the graph composed of green columns on the MACD indicator chart is that the bottom is higher than the bottom, that is, when the low point of the stock price is lower than the previous low point, but the low point of the indicator is higher than the previous low point, this phenomenon is called the bottom deviation phenomenon. Bottom deviation is generally a signal that the stock price may reverse upward at a low level, indicating that the stock price may rebound upward in the short term, which is a signal to buy stocks in the short term.
In practice, the deviation of MACD indicator is usually reliable in a strong market. When the stock price is at a high price, it is usually confirmed that the stock price is about to reverse once, while when the stock price is at a low level, it is generally confirmed after repeated deviations. Therefore, the accuracy of the top deviation of MACD indicator is higher than that of the bottom deviation, and investors should pay attention to it.