MACD (Moving Average Convergence/Divergence) is a measure of how quickly the stock or index has risen or fallen, and thus can demonstrate an overbought or oversold condition. Both high and low MACD values are unsustainable, and thus are great indicators in market timing. The MACD is the difference between the stock's 12 Day Exponential Moving Average (EMA) and its 26 Day EMA. A high MACD means the stock has risen quickly. Conversely, a low MACD means the stock price has fallen quickly. Both are unsustainable (trees do not grow to the sky).

The MACD Crossover measures the MACD versus its 9 day EMA, and gives an indication of the MACD's direction. Traders look for the MACD Crossover to cross zero (0) as a buy or sell trigger. A low MACD with the MACD Crossover rising above zero can signal a buy. A high MACD with the MACD Crossover falling below zero can indicate a sell signal.