Glossary
MACD: meaning, example and why it matters
Moving average convergence divergence: the gap between a 12-period and a 26-period EMA, compared with a 9-period signal line. When the MACD line is above its signal line, momentum is usually read as positive; it is a lagging indicator.
Worked example
If the 12-period EMA is 105 and the 26-period EMA is 102, the MACD line is 3. If the 9-period signal line is 2.5, the MACD is 0.5 above its signal line.
Illustrative numbers for explanation only. They are not market data, a forecast or a suggestion.
Why it matters
MACD condenses two moving averages into one line, so changes in the gap between them are easy to see on a chart.
Related terms
See it in practice
Frequently asked questions
Is MACD a prediction?
No. It is calculated from past prices and describes how two averages relate now.
Is this page investment advice?
No. MACD is explained in general terms with illustrative numbers. Market Dekho is not a SEBI-registered Research Analyst or Investment Adviser.
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