Moving Average Convergence Divergence (MACD)
📈 Investing
Quick Definition
MACD is a trend-following momentum indicator that shows the relationship between two moving averages of a security's price.
Formula
MACD = 12-day EMA - 26-day EMAExamples
- 1A trader notices that the MACD line crosses above the signal line, indicating a potential buy signal.
- 2An investor observes the MACD line crossing below the signal line, suggesting a sell signal.
- 3A financial analyst uses MACD divergence to predict a possible reversal in the stock market trend.
Tags
MACDmomentum-indicatortradinginvestingstock-analysis
Related Terms
Other terms you might find helpful
Bear Market
A bear market refers to a period in which stock prices fall by 20% or more from recent highs, typically leading to widespread pessimism and negative investor sentiment.
Bull Market
A bull market refers to a financial market condition where prices are rising or are expected to rise.
Stock Market
The stock market is a collection of markets where stocks (shares of ownership in businesses) are bought, sold, and issued, reflecting the economic trends and the performance of companies.
Technical Analysis
Technical analysis is a method used to evaluate and predict future prices of securities based on historical price and volume data.
Quick Info
Category:Investing
Difficulty:intermediate
Last Updated:6/19/2025