MACD
MACD (moving average convergence divergence) tracks momentum as the gap between the 12 and 26-period EMAs of price, with a 9-period signal line and a histogram showing whether that gap is widening or shrinking.
The MACD line is one subtraction: the 12-period EMA minus the 26-period EMA. When the fast average is above the slow one the line is positive and the short-term trend leads the long; the further apart they pull, the stronger the momentum. The signal line is a 9-period EMA of the MACD line itself, and the histogram is the difference between the two — momentum's momentum, turning before either line does.
Three events get traded on daily bars, in order of speed. The histogram flipping sign is earliest and noisiest. The line crossing the signal is the standard trigger, and where it happens matters: a bullish cross below zero is a downswing turning, one above zero a trend resuming after a pause. The line crossing zero itself is slowest and sternest — the 12-day EMA has overtaken the 26 outright, confirming a change rather than anticipating one.
MACD's failure mode is the sideways market. Built entirely from trend-following averages, it needs a trend to say anything true; in a range the line hugs zero and crosses its signal constantly, each cross as plausible as the last. It is also unbounded and denominated in rupees, so raw values cannot be compared across stocks — a ₹4,000 stock produces bigger MACD numbers than a ₹40 one on identical charts.
Its nearest neighbour is the pair of EMAs it is made from: macd().line above zero and ema(12) above ema(26) are the same statement. What MACD adds is the signal line and histogram — a measure of whether the gap is growing or fading, which the raw averages do not show.
In Sift
Written as macd().line / .signal / .hist. A working scan — stocks with a fresh bullish MACD cross below zero — a downswing turning, not a trend pausing:
where macd().line crossed above macd().signal within 3 bars and macd().line < 01
of the 500 most-traded NSE stocks match today, as of 20 Aug 2026
Scans that use it
Prebuilt scans in the library whose query reads this value — each with a hit-rate replay over the last 250 sessions.
Common questions
What do the MACD numbers 12, 26 and 9 mean?
They are the three EMA periods: the MACD line is the 12-period EMA of price minus the 26-period, and the signal line is a 9-period EMA of that difference. Gerald Appel set them against a six-day trading week decades ago and they simply stuck — their value now is that everyone watches the same lines.
Is a MACD crossover a reliable signal?
It depends almost entirely on regime. In trending stocks the signal-line cross catches swings usefully; in rangebound ones it fires constantly and most crosses fail. Where the cross happens also matters — below zero it marks reversal, above zero continuation. The hit-rate replay lets you check both claims on actual NSE history rather than folklore.
What does the MACD histogram show?
The gap between the MACD line and its signal line — effectively whether momentum is accelerating or fading. It shrinks before the lines cross, which is why histogram watchers see turns a few bars early, and why they also see more false ones. Read it as the earliest and least reliable of MACD's three signals.