Moving Average Convergence Divergence (MACD) is a popular technical indicator used to gauge price momentum and trends. It consists of three key components:
- MACD Line: The difference between the 12-period and 26-period exponential moving averages (EMAs).
- Signal Line: A 9-period EMA of the MACD line.
- MACD Histogram: The difference between the MACD line and the signal line. It visually shows the momentum of price changes.
Index Price and MACD:
Combining Index Price with the MACD histogram can give you insights into price trends for broader market movement, helping confirm buy/sell decisions.
