Moving Average Convergence Divergence (MACD) - Indicator Formula

The formulas are as follows:

MACD = ( EMA( C, 12 ) - EMA( C, 26 ) )

MACDS = MA( MACD, 9 )

where:

MACD = macd at the current day

MACDS = SIGNAL line of the MACD at the current day

EMA = exponential moving average

MA = simple moving average

C = current bar Close

The indicator moves around a zero line. In fact, when the short average is above that of the long the difference will be positive and the indicator is above zero identifying an upward trend and vice versa in case the short average is below that of the long one; when the two averages intersect their value coincides and the indicator line is on the zero.

The interpretation can be twofold here, too.