MACD is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. It is calculated by subtracting the 26-period EMA from the 12-period EMA. The result of that calculation is the MACD line. A nine-day EMA of the MACD called the 'signal line' is then plotted on top of the MACD line, which can function as a trigger for buy and sell signals.

MACD is a widely used technical analysis tool, primarily designed to capture trend reversals and price momentum in financial assets. It consists of two main parts: the MACD line and the Signal line.
When the MACD line crosses above the Signal line, it’s generally considered a buy signal, indicating that the trend may be reversing upward.

When the MACD line crosses below the Signal line, it’s typically considered a sell signal, indicating that the trend may be reversing downward.

When the gap between the MACD line and Signal line increases, it suggests that the market momentum is increasing, and the trend might continue.

When the gap between the MACD line and Signal line narrows, it suggests that the market momentum is weakening, and the trend might reverse.

When the MACD line crosses the Signal line, it serves as a confirmation of a potential buy or sell signal. A bullish crossover is typically a buying opportunity, while a bearish crossover is a selling signal.