What is MACD?
Moving Average Convergence Divergence — how this momentum indicator identifies trend changes and signal crossovers.
The simple version
MACD (Moving Average Convergence Divergence) measures the relationship between two moving averages to show whether a stock's momentum is increasing or decreasing.
The three components
- MACD line — the difference between the 12-day and 26-day exponential moving averages (EMA). Positive means the short EMA is above the long EMA (bullish momentum).
- Signal line — a 9-day EMA of the MACD line itself. Smoother, lags slightly behind.
- Histogram — the gap between the MACD line and signal line, shown as bars. Growing bars = accelerating momentum.
Key signals to watch
- Bullish crossover — MACD line crosses above the signal line. Momentum is turning upward.
- Bearish crossover — MACD line crosses below the signal line. Momentum is turning downward.
- Zero-line cross — MACD crossing above zero confirms an uptrend is underway (or below zero for downtrend).
- Divergence — price makes a new high but MACD does not. This "divergence" suggests weakening momentum and potential reversal.
On TradeMind AI
The MACD sub-chart is available on every stock's chart view. A bullish MACD crossover combined with an RSI below 70 is one of the stronger technical setups the AI looks for when generating BULLISH signals.
Limitations
MACD is a lagging indicator — it uses past prices. In choppy, sideways markets it generates false crossovers frequently. It works best in trending markets.
See it in action
Every TradeMind AI signal shows confidence score, entry, stop, target, and R-multiple — all explained with tooltip hints when you hover the term.