Momentum read from the gap between two moving averages
MACD, short for moving average convergence divergence, plots the difference between a short and a long moving average. That line is compared with its own average, the signal line, to read shifts in momentum. Crossings of the two draw the most attention, but since both come from moving averages, the reading lags the price.
A 12-day average at $1,050 against a 26-day at $1,020 puts MACD at +30. A narrowing gap says the advance is losing steam.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.