Tim, I have read so much about the MACD indicator and began to incorporate it into my stock selection process. My question to you is this: Do you find it reliable despite the fact that it is a lagging indicator? —J.B.
Tim Lutts: MACD can be useful, but it's not one of our regular tools. MACD, you see, is basically a prism through which one looks at historical price action ... a filter or simplifier, if you will. With chart-reading experience, we've found it more useful to discard most such filters and look straight at the data itself ... daily price and volume charts. Our main filter are simple moving averages--25-day, 50-day and 200-day.
Timothy Lutts
President, Chief Investment Strategist, Editor of Cabot Stock of the Month
Timothy Lutts heads one of America’s most respected independent investment advisory services, publishing eight newsletters to more than 200,000 subscribers around the world. Tim leads a dedicated team of professionals who serve individual investors with high-quality investment advice based on time-tested Cabot systems. Under his leadership, Cabot has been honored numerous times by both Timer Digest and the Hulbert Financial Digest as among the top investment newsletters in the industry. Tim also edits Cabot Stock of the Month.
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