Moving Average Convergence Divergence (MACD) is a momentum indicator based on the moving average for technical analysis. The MACD shows the relationship between both the fast and slow Exponential Moving Averages (EMAs) of closing prices. A fast EMA represents one within a time frame of twelve days, while a slow EMA represents twenty-six days.
Calculation: MACD line = 12-period EMA of price – 26-period of EMA of price.
In general, when the MACD falls below the signal line it can be regarded as bearish and is likely to imply a time to sell, while when MACD rises above the signal line, it indicates a bullish trend which may indicate a price uptrend.