MACD

MACD is a method of generating buy signals and sell signals for stocks. MACD is based on exponential moving averages.

There are two different lines in MACD, one line is called MACD and the other line is called the signal line. MACD is calculated as the value for a 12-day exponential moving average minus the value of a 25 days exponential moving average. MACD is therefore a measure of the difference between a short exponential moving average and a longer exponential moving average. The signal line is calculated as a 9-day exponential moving average on MACD. Buy signals and sell signals in the MACD-analysis is given when the MACD line crosses the zero line or the signal line.