when di is above di then the trend is down or at least downward movement is outpacing upward movement recently if di is above di then the trend is up or upward price movement is outpacing downward price movement recently 
because these two lines can indicate trend direction crossovers are sometimes used as trade signals the di crossing above the di signals a down move price and is therefore a sell or short trade signal a buy signal occurs if the di crosses above the di these indicators are part of the average directional index adx system the addition of the adx line which is a smoothed average of the difference between the di and di helps traders see how strong the current trend is typically readings above 20 on the adx and especially above 25 show a strong trend is present traders can utilize all the elements in the adx system to help make better trading decisions for example the di and di lines show the trend direction and crossovers adx shows trend strength so a trader may decide to only take long trades when adx is above 20 and the di is above or crossing the di the differences between the negative directional indicator and a moving averagea moving average takes the average price of an asset over a set time period the negative directional indicator di is only concerned with the prior low relative to the current low when applicable because of this the di is not an average even though it may sometimes appear to track the price when the price is falling due to the different calculations of the two indicators the di and the moving average will provide the trader with different information limitations of using the negative directional indicatorthe di provides limited information on its own it is much more useful when combined with the di line by looking at the relationship between the two lines traders can better assess whether upward or downward price movement is stronger because traders often look at the relationship between these two lines and crossovers it should be noted that di and di lines may intersect frequently this can result in whipsaws whipsaws are when the lines cross back and forth triggering trades but the price of the asset doesn t follow through and the trader loses money savvy investors use other forms of technical and fundamental analysis to confirm what the di lines are suggesting 