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Moving Average Convergence Divergence (MACD)
Technical Analysis
MACD is a momentum indicator equal to the 12-day exponential moving average minus the 26-day exponential moving average.
A 9-day EMA of that difference is the signal line, and the gap between MACD and the signal line is the histogram. MACD crossing above its signal line is conventionally read as momentum turning up, crossing below as turning down. Because it is derived from averages it lags, and in sideways markets it produces frequent misleading crosses.
Example
If the 12-day EMA is $105 and the 26-day EMA is $102, MACD is 3. With a signal line at 2.5, the histogram shows 0.5.
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