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| Moving Average Convergence Divergence (MACD) |
| The MACD indicator shows the relation between two moving averages. The value of MACD1, also named fast line, is the difference between 26-day exponential moving average (EMA)* and 12-day EMA. MACD2 is a 9-day EMA of MACD1. The bar indicates the difference between MACD1 and MACD2. Same calculations applied to weekly and monthly charts. |
The bar is above zero signals upward momentum and vice versa. When fast line moves faster than the slow line, it indicates as buy signal. In Contrast, when fast line moves slower than the fast line, it indicates as sell signal.
*Note: Exponential moving average (EMA) is a type of moving average that is similar to a simple moving average, except that more weight is given to the latest data.
Figure: A MACD chart of Hang Seng Bank
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Chart Guide
