MACD:-Moving Average Convergence & Divergence

It is a momentum technical indicator developed by Gerald Appel in 1960s. It indicates the difference between long term (26) and short term (12) Exponential Moving Averages. It is calculated as follows: MACD=EMA {12} of price- EMA {26} of price. Trigger line: - The trigger line or Signal line if derived from smoothing with an EMA, function as a trigger for buy and sell signals

Signal=EMA [9] of MACD

The difference between MACD and signal line is shown as solid histogram style. Histogram=MACD-signal Interpretation The three types of trading signals are generated:MACD line Crossing the signal line When the MACD line crosses the signal line from lower levels its an indication for buying and vice versa. Crossing the 0 median line When the MACD line cross above the 0 line is interpreted as bullish and cross below the 0 as bearish. Divergence between MACD line and Price Positive divergence: - It arises when prices make a new selloff, but the MACD will remain on the higher side (Remains on the point where it fell) signaling bullish trend. Negative Divergence: - When prices make new high MACD doesnt rise as high as before signaling bearish trend is still continuing.

Negative Divergence-bearish trend has been shown in the GUR ncdex daily chart

Positive Divergence-bullish trend has been shown in the copper mcx daily chart

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