MACD, short for moving average convergence/divergence, is a trading indicator used in technical analysis of stock prices, created by Gerald Appel in the late 1970s. It reveals changes in the strength, direction, momentum, and duration of a trend in a stock’s price. MACD is calculated by subtracting the 26-day Exponential Moving Average (EMA is a type of moving average that is similar to a simple moving average, except that more weight is given to the latest data) from the 12-day EMA. A nine-day EMA of the MACD, called the “signal line”, is then plotted on top of the MACD, functioning as a trigger for buy and sell signals.
This is a companion discussion topic for the original entry at https://www.optuma.com/kb/optuma/tools/averages/macd-combo