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Moving Average Convergence Divergence
The trend-following momentum indicator used to identify buy and sell signals
APEX Weight15%
Fast EMA12 days
Slow EMA26 days
Signal Line9 days
TypeTrend + Momentum
Created1979 · Gerald Appel
Live 14-Day Chart + MACD
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What Is MACD?
MACD measures the relationship between two exponential moving averages of a stock's price. It helps traders identify when momentum is shifting — before the price move fully plays out.
Unlike RSI which measures speed of price change, MACD measures the direction and strength of trend. It's most powerful when used alongside RSI — which is why APEX combines them as a single signal (MACD+RSI) with the highest weight in its model.
MACD Line
The difference between the 12-day and 26-day EMA. When positive, short-term momentum is stronger than long-term.
Signal Line
9-day EMA of the MACD line. When MACD crosses above this line — BUY signal. When it crosses below — SELL signal.
Histogram
The difference between MACD and Signal line. Growing bars = strengthening momentum. Shrinking bars = momentum fading.
THE FORMULA
MACD = EMA(12) − EMA(26)
Signal = EMA(9) of MACD · Histogram = MACD − Signal
How MACD Is Calculated
01
Calculate 12-day EMA
Compute the exponential moving average of the last 12 trading days. Recent prices are weighted more heavily.
02
Calculate 26-day EMA
Compute the 26-day EMA. This is the slower, longer-term trend line.
03
Subtract to get MACD line
MACD = EMA(12) − EMA(26). Positive when short-term momentum exceeds long-term.
04
Calculate 9-day signal line
Apply a 9-day EMA to the MACD line. Crossovers between MACD and signal generate trade signals.
05
Calculate histogram
Histogram = MACD − Signal. Visualizes the gap between the two lines. Predicts crossovers early.
MACD Signals — What Institutional Traders Watch
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Bullish Crossover
MACD crosses above the signal line. The most reliable buy signal. Stronger when it happens below the zero line.
Buy Signal
💥
Bearish Crossover
MACD crosses below the signal line. Classic sell signal. Most powerful when it happens above the zero line.
Sell Signal
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Zero Line Cross Up
MACD crosses above zero. Confirms the trend has shifted bullish. Used as confirmation of a buy signal.
Trend Confirmation
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Zero Line Cross Down
MACD crosses below zero. Trend has shifted bearish. Consider reducing or exiting positions.
Bearish Confirmation
⚠️
Bullish Divergence
Price makes lower lows but MACD makes higher lows. Signals potential reversal — bears losing steam.
Reversal Warning
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Bearish Divergence
Price makes higher highs but MACD makes lower highs. One of the most reliable reversal signals in technical analysis.
Top Warning
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Expanding Histogram
Histogram bars growing taller. Momentum accelerating in the current direction. Trend likely to continue.
Momentum Building
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Shrinking Histogram
Histogram bars shrinking. Momentum decelerating. Could signal upcoming crossover — watch closely.
Momentum Fading
Real Market Examples
NVDA
BULLISH CROSS
Apr 2023
NVDA — BULLISH CROSS
MACD crossed above signal line as AI hype began. Preceded +400% rally over 12 months. One of the most reliable MACD signals in recent memory.
✅ APEX would flag: MACD bullish — confirm with RSI before entering
How APEX Uses MACD
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15% Weight — Plus 20% as MACD+RSI
MACD alone is 15% of the composite score. But APEX also combines MACD and RSI together as a single confirmation signal worth 20% — making MACD data account for up to 35% of your total score.
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Always Confirmed With RSI
APEX never acts on MACD alone. A MACD crossover confirmed by RSI above 50 is a high-confidence signal. MACD crossover with RSI below 50 gets a lower score.
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Cross-Referenced With Supply Chain
A MACD buy signal in a stock with deteriorating supply chain health gets flagged as high risk. The sphere tells you what MACD cannot.
🎯
MACD Death Cross = Exit Trigger
A MACD bearish crossover combined with RSI above 70 automatically generates a Trim 25% exit trigger in your Exit Plan tab.
APEX Signal Weight Distribution
MACD+RSI
20%
RSI
18%
MACD ←
15%
MA Cross
12%
Bollinger
10%
Volume
10%
Sentiment
8%
Fundamentals
7%
⚡ MACD contributes 15% directly + 20% as MACD+RSI — potentially 35% of your composite score
⚠️ Common MACD Mistakes — What Retail Investors Get Wrong
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Buying every MACD crossover
✓ Fix: In choppy sideways markets MACD generates many false crossovers. Always check if the stock is trending before acting on a crossover.
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Using MACD alone without RSI confirmation
✓ Fix: MACD tells you direction. RSI tells you momentum strength. APEX combines both because neither is reliable alone.
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Ignoring divergence signals
✓ Fix: Bearish MACD divergence — price up but MACD down — is one of the most reliable reversal signals. Most retail investors miss it entirely.
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Using default settings for all timeframes
✓ Fix: The 12/26/9 settings work for daily charts. Day traders use 3/10/16. Long-term investors use 24/52/18. APEX optimizes per timeframe.
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Treating the zero line as unimportant
✓ Fix: MACD crossing zero is a major trend confirmation signal. A crossover above zero is far more reliable than one happening below zero.
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Acting on histogram alone
✓ Fix: A shrinking histogram does NOT mean sell. It means momentum is slowing. Wait for the actual line crossover before acting.
See MACD in action on a real stock
APEX combines MACD with RSI and 6 other signals for the full institutional picture
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