MACD

MACD is a trend-following oscillator. When the faster EMA is above the slower one, MACD is positive. The signal line smooths MACD. A cross of MACD through its signal is a change in the spread between the two EMAs. The histogram is that cross seen as bars. It is still two moving averages. It is not a bounded momentum oscillator like RSI.

Because the EMAs are in price units, MACD's height depends on the price of the instrument. You cannot compare a MACD reading of 5 on a 100-rupee stock with 5 on an index. Zero is comparable: it is where the two EMAs meet. Divergences, a new price high with a lower MACD high, are a warning that the spread is no longer expanding. They are not a signal by themselves.

A cross up through the signal, especially from below zero after a decline, is the bullish version. Taking it above zero in a strong uptrend is a continuation cross and it is late.

A cross down through the signal is the bearish version. In a strong uptrend, sell signals from MACD fire on every dip and fail. Use the higher-timeframe trend as a filter or expect those failures.

Reading the histogram as volume, and treating a divergence as a reversal without a break in price structure.

MACD lags because both inputs lag. It will not call a V-bottom in time to catch the V. It is useful for staying with a swing, and expensive in chop, like every EMA cross.