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Glossary · Pro tools

MACD

Momentum shown as the gap between a fast (12-day) and a slow (26-day) average of the price.

Why it matters

When the fast average pulls away above the slow one, momentum is building upward; when it sinks below, momentum is fading. The signal line is a 9-day average of that gap.

How to read it

MACD crossing above its signal line is read as momentum turning up, crossing below as turning down. The bars show the distance between the two. It lags the price, so it confirms trends rather than predicting them.

Also called: moving average convergence divergence

Related

RSI (Relative Strength Index)A 0 to 100 gauge of how hard a stock has been bought or sold over the last 14 days.Moving averageThe average closing price over a set number of days, drawn as a line.Golden crossThe 50-day average price crossing above the 200-day average.

In the Cluenex app, this explanation opens next to every macd figure, with the live reading for the stock you are looking at. Open it in Cluenex