is possible to anticipate a moving average crossover if the KST has already turned and the price violates a trendline. The KST started to reverse to the downside before the up trendline was violated. Since either a reversal or a trading range follow a valid trendline violation, it's evident that upside momentum has temporarily dissipated, causing the KST to cross below its moving average. Traditionally, the MACD gives buy and sell signals when it crosses above and below its exponential moving average, known as the “signal line”. This approach isn't perfect; the ellipses on the chart highlight all the whipsaws. As said earlier, the KST can also give false or misleading signals, as you can see from the April 2005 buy signal. It comes close to a couple of whipsaws, but by and large, it's more accurate, even though the MACD often turns faster than the KST. Overbought/oversold and divergences The concept is that when the indicator crosses above and below the overbought/oversold zones, momentum buy and sell signals are triggered. Even so, you must wait for some kind of trend reversal signal in the price, such as a price pattern completion, trendline violation, or similar. The KST often diverges positively and negatively with the price. Trendline violations and price pattern completions It is possible to construct a trendline on the KST and see when it's been violated, but not very often. When it does though, it usually results in a powerful signal. See also AdvisorShares References Technical indicators