MACD

Moving Average Convergence Divergence (MACD), created by Gerald Appel in the late 1970s, is a technical indicator that generates buy and sell signals. Securities traders use it to enter and exit positions. Values of MACD are displayed on a separate chart from the price of a security, usually in a window above or below the price chart. The MACD x-axis is the same as the price chart, e.g., daily, hourly, etc., but values of MACD on the y-axis are much smaller and oscillate around a value of zero, making it more practical to show the study in a separate window.

Upper Chart:

12-day EMA = Purple line

26-day EMA = Green line

Lower Chart:

MACD line = Blue line

Signal line = Orange line

Histogram = Pink line

Zero = Gray line