MACD stands for Moving Average Convergence Divergence. It takes the difference between a fast EMA (12-period) and a slow EMA (26-period). When the fast EMA is above the slow one, MACD is positive, meaning recent momentum is bullish. When below, it's negative. A separate "signal line" (9-period EMA of the MACD itself) helps identify when momentum is shifting.

The MACD histogram (the bar chart between the MACD line and the signal line) is where the action is. When the bars are growing, momentum is accelerating. When they're shrinking, momentum is fading, even if the trend hasn't reversed yet. A crossover (MACD crossing the signal line) is one of the most widely followed buy/sell signals in technical analysis.

MACD combines trend and momentum in one indicator. A positive and rising MACD means the trend is up and strengthening. A positive but falling MACD means the trend is still up but losing steam. This two-dimensional read gives more nuance than most single indicators.