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MACD

A momentum indicator built from the difference between two moving averages.

Technical AnalysisIntermediate

Definition

MACD subtracts a 26-period EMA from a 12-period EMA, then plots a 9-period EMA of that line as the signal. The histogram shows the gap between the two. A crossover of the MACD line above its signal line is read as improving momentum; below, as fading momentum.

Watch out for

MACD lags and gives many false crosses in sideways markets. Divergence with price is a widely watched warning, not a forecast.

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