flywhale / macd

Algorithm plotting moving average convergence/divergence trading indicator.

Name: macd.py
Description:Plots moving average convergence/divergence trading indicator

Interpretation

The MACD line oscialtes above/below the 0 benchmark. A positive MACD implies that the 12-day moving average (fast line) is above the 26-day moving average (slow line). Moreover, a positive MACD line with positive slope implies the fast line is diverging from the slow line which shows upward momentum. A negative MACD line showing underlying divergence indicates downward momentum.

The signal line is useful in generating buy/sell signals. Specifically, the MACD line crossing the signal line from the bottom indicates a buy signal whereas the MACD crossing the signal line from the top indicates a sell signal.