Abbreviation of Moving Average Convergence/Divergence. MACD is a technical analysis tool designed to identify changes in market trends. It operates by measuring the difference between the exponential moving average (EMA) of the closing price of a security for two different periods, normally 26 days and 12 days. The averages are used to provide the data for a momentum oscillator by the subtraction of the 26-day average from the 12-day average. The plot that results forms a line that oscillates above and below zero. If the 12-day average is above the 26-day average, and widening the MACD is positive, indicating that the rate of change of the faster 12-day moving average is higher than the rate of change of the slower 26-day one. Upward market momentum is increasing, suggesting a bullish trading period. If the MACD is negative and declining then the difference between the 12 and 26-day average is increasing to the downside, suggesting a bearish period. Sell and buy signals are generated when the two averages cross. Overbought and oversold signals can be indicated when both lines are significantly above or below the zero line respectively. A 9-day average is plotted to act as a trigger line. A bullish crossover occurs when the MACD moves above the 9-day average and a bearish crossover occurs when it moves below.