The Moving Average Convergence Divergence (MACD) is a popular technical analysis tool used in financial markets to identify potential buy and sell signals. It consists of two moving averages: the 12-day exponential moving average (EMA) and the 26-day EMA. The MACD line is calculated by subtracting the longer EMA from the shorter one, and a signal line, typically a 9-day EMA, is plotted on top to help traders spot trends. Traders look for crossovers between the MACD line and the signal line to make decisions. When the MACD line crosses above the signal line, it may indicate a bullish trend, while a crossover below suggests a bearish trend. Additionally, the distance between the two lines can indicate the strength of the trend, helping traders assess market momentum.