Moving average convergence/divergence (MACD) is a technical indicator to help traders determine price trends, measure the momentum, and identify entry points for buying or selling. Moving average convergence/divergence normally -referred to as (MACD) is a trend-following indicator that shows the relationship between two exponential moving averages (EMAs) of a ETF or equities price. MACD was developed in the 1970s by Gerald Appel, and is one of the most popular technical tools, readily available on most trading platforms offered.

The MACD is comprised of two lines that help to zero in on entry and exit points.

When the black line crosses up and is on top of the red line and is heading up, price will rise.  When it crosses down and is below the red line and slopping down, price will drop.

The standard setting is 12,26,9 for the MACD.  Some traders tweak the numbers, but reading the indicator is the same.  Crosses up or down signal a change in price direction and the slope of the line indicates strength.  The lines flattening or a flattening or narrowing white space between the lines suggests shallow swing moves or a change is brewing. Lines sloping straight down or up with wide white space between the lines suggest strong moves.

The MACD tells a story about the equity and what is apt to happen next with price.

I wish you the best,

Wendy