Although it is often grouped with oscillators, the MACD is more of an intermediate-term trend indicator (although it can reflect overbought and oversold conditions).
The default MACD line (which can also be plotted as a histogram) is created by subtracting a 26 period exponential moving average (EMA) of closing prices from a 12-period EMA of closing prices; a nine period EMA is then applied to the MACD line to create a “signal line.”
MACD = EMA(C,12)-EMA(C,26)
Signal line = EMA(MACD,9)
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