MACD (Moving Average Convergence Divergence) is one of the most popular trend-following momentum indicators. Developed by Gerald Appel, MACD uses three components: the MACD line (12 EMA − 26 EMA), the signal line (9 EMA of MACD), and the histogram (MACD − signal). When MACD crosses above the signal line, it generates a bullish signal. When it crosses below, bearish. MACD is excellent for identifying trend direction and momentum in NSE/BSE stocks.
MACD Line = 12-period EMA − 26-period EMA. Signal Line = 9-period EMA of MACD Line. Histogram = MACD Line − Signal Line. The standard settings (12, 26, 9) are used by most traders. For faster signals, try (5, 13, 1). For swing trading, (12, 26, 9) on daily chart is standard.
A bullish crossover happens when the MACD line crosses above the signal line. This signals upward momentum and is a potential buy signal. The crossover is strongest when it happens below the zero line (oversold territory). Combined with volume confirmation, it's one of the most reliable entry signals.
The MACD histogram shows the gap between MACD and signal lines. Rising histogram bars = strengthening momentum. Falling bars = weakening momentum. When histogram goes from negative to positive = bullish signal. When positive to negative = bearish. Histogram divergence often precedes price reversals.
When MACD crosses above zero = bullish (short EMA is above long EMA, trend is up). When MACD crosses below zero = bearish. Zero line crossovers are slower signals than signal line crossovers but more reliable for trend trading. Best used on daily/weekly charts for positional trades.
Our free StoxGo Scanner screens for MACD bullish crossovers, bearish crossovers, and histogram reversals across NSE and BSE stocks daily. Check the scanner for fresh MACD-based technical setups updated every trading session.
Open your Angel One account in 5 minutes — zero account opening fee via StoxGo.
Disclaimer: This content is for educational purposes only and is not investment advice. Stock market investments are subject to market risk. Please read all scheme-related documents carefully before investing. StoxGo is an authorized Angel One partner.