MACD, short for Moving Average Convergence/Divergence, is an economic indicator utilized in technical analysis of share prices, developed by Gerald Appel in late 1970s macd indicator. It is a charting tool that shows trend changes in the price of a particular stock over time. MACD uses moving averages, which are typically lagging indicators, to show stock price changes. Because the MACD does not have a defined ending point, it is commonly used as a support or resistance level indicator.
One of the most popular MACD indicator concepts is the MACD Overbought/orset. It compares a current stock price against the MACD’s overbought and oversold conditions. If the current stock price is weaker than the moving average line, it is said to be overbought. Conversely, if the current stock price is stronger than the overbought/oversold condition, it is said to be oversold. A positive divergence between the MACD and a relative strength index such as the Stochastic Indicator, is said to be overbought or oversold.
Another concept of MACD that bears a resemblance to the above-mentioned concept is the MACD in Bearish Form. Whereas the previous concept refers to overbought and oversold conditions, the latter indicates an opposite trend from the overbought and oversold conditions. Again, a positive divergence between the MACD and a relative strength index such as the Stochastic Indicator is indicative of overbought conditions.