What Is MACD?
Moving Average Convergence Divergence: a momentum measure built from two price averages.
The Full Definition
MACD subtracts a slower exponential moving average of the price (26 periods) from a faster one (12 periods). A 9-period average of that line, called the signal line, smooths it further, and the gap between the two is the histogram. When the histogram grows, momentum is improving; when it shrinks, momentum is fading. MACD above zero means the faster average sits above the slower one. Crossovers get a lot of attention, but on their own they aren't reliable buy or sell signals.
Real-World Example
If a stock's weekly MACD histogram rises for several weeks while the line is still below zero, momentum is improving even though the longer trend hasn't turned. Wealth Catchers shows MACD as context in Entry Point Analysis.