Trends/Momentum oscillators

MACD divergence

Price makes a new high or low, but MACD does not.

Momentum oscillatorsBest on 3M, 6M, 1YAlso called MACD vs price

Illustration of the MACD divergence shape. It is a sketch, not real price data.

What it shows

Like RSI divergence, a MACD divergence compares two swings. If price makes a higher high while the MACD line makes a lower high, the push in price was supported by less momentum than the one before.

It is a comparison between two numbers, and says nothing about how long it will last.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

Find two consecutive swing highs (or lows) in price.
Read the MACD line at each of the two points.
Mark divergence if price and MACD moved in opposite directions.
Draw a line for each pair.

Starting values: MACD 12, 26, 9; Swing 5 bars each side. These are proposed and will be tuned on real price data before launch.

How to read it

Price highs rise. MACD highs fall.
The two sloped lines point apart.
The size of the gap shows how far apart they are.

Status labels you may see

Label	What it means
Divergence at highs	Price high higher, MACD high lower.
Divergence at lows	Price low lower, MACD low higher.
None	No divergence in the last 40 bars.

What cancels it

Cancelled when MACD makes a new extreme matching price.

What traders check next

The number of swings covered.
What price did next in past cases.
The MACD zero line.

Limits

Persists for long in strong trends.
Swing choice changes results.
Divergences are frequent.

Try it in forecastviz

Open any ticker and choose Momentum oscillators → MACD divergence in the left menu.
Switch between 3M, 6M, 1Y to see how the picture changes.
Compare with RSI divergence and MACD on the same chart.

Open on a ticker

Questions

RSI or MACD, which is better?

They measure different things. Many traders compare both.

Is it a reversal signal?

No claim.