Learn the terms · Longer read
MACD: two moving averages, compared
Two moving averages of the price, one faster (12 days) and one slower (26 days), compared with each other. When the faster crosses above the slower, chart-watchers read momentum as turning up; crossing below, turning down.
What it measures
MACD - Moving Average Convergence Divergence - takes the difference between a 12-day and a 26-day exponential moving average of the closing price. When the recent average is above the longer one, the line is positive: the price has been higher lately than it was over the wider window. When it is below, the line is negative. A third average, over 9 days of the MACD line itself, is the "signal line", and chart-watchers watch the crossing of these two.
So a MACD crossover is a statement about the last few weeks against the last month or so. It says nothing about the year, the company or the market around it. The three numbers - 12, 26, 9 - are the ones Gerald Appel published in the 1970s and the ones nearly every platform still uses; Trendentum's methodology page states them, and your own strategy settings can change them - for this chart figure only, never for the outlook.
How to read a cross
Chart-watchers treat the day the MACD line crosses its signal line as the event. Trendentum's chart figure is plainer: it gives both values and says only whether the MACD line is above or below its signal line today, with no cross date. A cross from this morning and one from three weeks ago both read "above its signal line", though they are different facts; the price chart shows when the lines met.
Crossovers have one well-known weakness. In a price that is drifting sideways, the two lines sit close together and cross often, each time saying momentum has turned - and each time the price wanders back. That is a whipsaw. It is the reason the backdrop at the top of Market Conditions matters: when the index itself is range-bound, a single MACD cross has historically been weaker evidence than the same cross inside a trend, and the app says so on the row.
What it is not
MACD does not measure how far a move will go or whether a stock is priced high or low against anything. Two stocks can cross the same day for opposite reasons - one recovering from a fall, one pausing in a rise - and the indicator cannot tell them apart. It is also a lagging read by construction: an average of the past cannot turn before the price does.
On Trendentum it no longer votes. Until 8 October 2026 it was one of five rules behind the outlook; it is now a chart figure with no vote, and the backtester does not score it. The outlook rests on three readings that share no input with it.
An example
A stock drifts from 50 to 46 over six weeks, then rallies to 49 in eight sessions. The 12-day average turns up quickly; the 26-day is still falling. When the MACD line rises through its 9-day signal line, the stock's chart figures change to "above its signal line". If the rally fades and the price slips back to 47, the lines cross again within days and the figure goes back to "below its signal line" - a whipsaw, and exactly what the backdrop row warns about when the index is range-bound. Neither cross changes the outlook.
Where you’ll see it on Trendentum
- Each stock's "Chart figures (no vote)" - the MACD line and its signal line, and which is above
- The price chart on each stock page, where MACD is drawn
- The methodology page, for the 12, 26 and 9 settings
Every term on this page is used the same way across the app, and the exact settings behind each chart figure are on the methodology page. Trendentum explains every call and never tells you what to do with it.