MACD (Moving Average Convergence Divergence)
A trend-following indicator showing the relationship between two moving averages.
Definition
MACD is a trend-following momentum indicator that shows the relationship between two exponential moving averages of a stock's price. It consists of the MACD line, a signal line, and a histogram of the difference between them. Assetick plots all three on a dedicated pane below each stock's price chart.
How it is calculated
The MACD line is the 12-period EMA minus the 26-period EMA. The signal line is a 9-period EMA of the MACD line. The histogram is the MACD line minus the signal line. When the histogram is above zero, short-term momentum is outpacing longer-term; below zero, the reverse.
How to read it
A bullish signal occurs when the MACD line crosses above the signal line; a bearish signal when it crosses below. The histogram growing taller shows strengthening momentum, while shrinking bars warn of a fading trend. Crossovers near the zero line carry more weight than those far from it.
For DSE investors
Because MACD relies on moving averages, it needs a continuous price history to be meaningful. On DSE stocks with long trading gaps, MACD readings can mislead until enough recent data accumulates. Assetick's scanner offers a 'MACD buy signal' preset that scans the whole market for fresh bullish crossovers.
Frequently asked questions
What does a MACD crossover mean?+
When the MACD line crosses above its signal line it is read as bullish momentum; crossing below is read as bearish. It signals a shift in short-term momentum, not a guaranteed price move.
What are the standard MACD settings?+
The conventional settings are 12, 26 and 9 — a 12-period fast EMA, a 26-period slow EMA, and a 9-period signal line. Assetick uses these standard values.