MACD (moving average convergence divergence) is the 12-day exponential moving average minus the 26-day one. When it is positive, the short-term trend is above the longer one.
- The signal line is a 9-day average of MACD. MACD crossing above it is a common buy signal; crossing below, a sell signal.
- The histogram is MACD minus the signal line. Growing bars mean momentum is increasing.
- Crossovers above zero are usually treated as stronger than those below zero.
MACD follows price, so its signals come late; in sideways markets it gives many false crossovers.