Combining MA150, RSI, and MACD for Confirmed Signals

Why One Indicator Isn’t Enough

Every technical indicator has blind spots. Moving averages lag behind price. RSI can stay oversold for weeks. MACD can generate false crossovers in choppy markets. Using any single indicator in isolation will produce many false signals that lead to losing trades.

The solution is confluence — waiting for multiple independent indicators to confirm the same signal. When different types of indicators (trend, momentum, oscillator) all point in the same direction, the probability of a successful trade increases dramatically.

The Four Indicators in Scanance

Scanance uses four indicators that each measure different aspects of price behavior:

• MA150 — Intermediate-term trend direction. Are we in an uptrend or downtrend?
• MA200 — Long-term institutional trend. Is the big-picture trend supportive?
• RSI — Momentum oscillator. Is the stock oversold (potential bounce) or overbought (potential pullback)?
• MACD — Momentum trend-follower. Is momentum shifting bullish or bearish?

How Confirmed Signals Work

A confirmed signal in Scanance occurs when at least 2 out of 4 indicators agree on the same direction for a stock.

Confirmed Buy Example

Imagine stock XYZ shows up in these tabs:

• MA150 Buy — Price is 0.5% above the MA150 (sitting on support)
• RSI Buy — RSI is at 28 (oversold)

Two indicators agree that XYZ is a buy → it appears in the Confirmed Buy tab. The stock is in an uptrend (near MA150 support) and momentum is oversold (RSI below 30). This is a high-probability setup because the trend and momentum are aligned.

The Strongest Confirmed Signals

The more indicators that agree, the stronger the signal:

• 2 out of 4 — Confirmed signal. Worth investigating.
• 3 out of 4 — Strong signal. High probability setup.
• 4 out of 4 — Rare but extremely strong. All indicators in complete agreement.

Real-World Example: The Perfect Confirmed Buy

Here’s what an ideal confirmed buy setup looks like:

1. The stock has been in a healthy uptrend for months (price above MA150 and MA200).
2. A pullback brings the price to within 1% of the MA150 or MA200 (moving average support).
3. During the pullback, RSI drops below 30 (oversold — the selling is overdone).
4. MACD shows a bullish crossover (momentum is starting to reverse back up).
5. You enter the trade near the moving average with a stop-loss just below it.

This setup has four layers of confirmation: trend support (MA), institutional support (MA200), oversold momentum (RSI), and momentum reversal (MACD). While no trade is guaranteed, this is about as high-probability as it gets.

How to Use Confirmed Signals in Practice

• Start with the Confirmed tab in Scanance. This is your shortlist of the best opportunities.
• Look at which indicators confirmed. A MA150 + RSI confirmation is different from a MACD + MA200 confirmation.
• Check the stock’s fundamentals. Click the ticker to see revenue, earnings, and company info. A confirmed technical signal on a fundamentally strong company is the ideal trade.
• Plan your risk. Even confirmed signals can fail. Use the MA150 or MA200 as your stop-loss level — if the price breaks below the moving average, the thesis is invalidated.

When to Be Cautious

• Conflicting signals — If MA150 says buy but RSI says overbought, the indicators disagree. Wait for alignment.
• Low-volume stocks — Confirmed signals on illiquid stocks are less reliable because small orders can move the price.
• Earnings announcements — Technical signals can be overridden by fundamental events like earnings. Be cautious trading confirmed signals just before an earnings report.
• Market-wide downtrends — In bear markets, even confirmed buy signals have a lower success rate. Consider reducing position sizes or focusing on short signals instead.