moving average convergence/divergence (MACD)
A popular technical indicator that is used to signal trading opportunities and to detect overbought and oversold conditions, as well as early signs of an end to a market trend. To use the MACD to identify buying and selling opportunities, technicians overlay it with a nine-day exponential moving average (EMA) signal line and watch for one to cross over the other. A significant divergence between the MACD and the signal line can indicate an overbought and oversold condition and a divergence from the price of a security can signal the end of the current trend.
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