MACD Values Are Not Comparable Across Stocks — a $20 Stock Runs About ±1.5 and a $100 Stock About ±10

MACD is a subtraction of two prices, so the answer is in the units of the price. Source 3 states the consequence plainly: “This means MACD values are dependent on the price of the underlying security.”^[3]

With the example it gives: “The MACD values for a $20 stocks may range from -1.5 to 1.5, while the MACD values for a $100 may range from -10 to +10.” And the conclusion: “It is not possible to compare MACD values for a group of securities with varying prices.”^[3]

It also names the replacement for the job MACD cannot do: “If you want to compare momentum readings, you should use the Percentage Price Oscillator (PPO), instead of the MACD.” This page does not describe the PPO; it records only that source 3 points there.^[3]

A related limit from the same source: “Because the MACD is unbounded, it is not particularly useful for identifying overbought and oversold levels.” — and “During sharp moves, the MACD can continue to over-extend beyond its historical extremes.”^[3]

Source 3 states the same three series in concrete terms: “The MACD line is the 12-day Exponential Moving Average (EMA) less the 26-day EMA.” “Closing prices are used for these moving averages.” “A nine-day EMA of the MACD line is plotted with the indicator, which acts as a signal line and identifies reversals.” “The MACD Histogram represents the difference between MACD and its nine-day EMA, the signal line.”^[3]

On the parameters the two sources agree: source 1 gives MACD(12,26,9) as the most common notation, and source 3 says “The values of 12, 26, and 9 are the typical settings used with the MACD, though other values can be substituted depending on your trading style and goals.” For a different cadence it offers a worked alternative — “MACD(5,35,5) is more sensitive than MACD(12,26,9) and might be better suited for weekly charts.”^[1][3]

The division of labour between the two averages is stated: “The shorter moving average (12-day) is faster and responsible for most MACD movements.” and “Positive MACD indicates that the 12-day EMA is above the 26-day EMA.”^[3]

Its own name note: “MACD can be pronounced as either “Mac-Dee” or “M-A-C-D.””^[3]

The MACD is not one line but three time series calculated from price data, most often the closing price. The MACD series is "the difference between a 'fast' (short period) exponential moving average (EMA), and a 'slow' (longer period) EMA of the price series." The signal or average series is "an EMA of the MACD series itself." The divergence series is the difference between those two, and is customarily drawn as a bar chart.^[1]

Parameters are written MACD(a,b,c), where a and b are the two price EMAs and c is the EMA of the MACD series. "The most commonly used values are 12, 26, and 9 days, that is, MACD(12,26,9)." The article notes these settings come "from the old days when technical analysis used to be mainly based on the daily charts", and that analysts vary them — "one popular short-term set-up, for example, is the (5,35,5)." So 12/26/9 is a convention, not a derived optimum.^[1]

This is the single most confusable thing about the indicator, and the source says so directly: elements of the MACD "have become known by multiple and often over-loaded terms." "Divergence" is used for at least three distinct things.^[1]

First, as the D in the name: "divergence refers to the two underlying moving averages drifting apart, while convergence refers to the two underlying moving averages coming towards each other." Second, "Thomas Asprey dubbed the difference between the MACD and its signal line the 'divergence' series" — that is the bar chart. Third, Gerald Appel used it for "the situation where the MACD line does not conform to the price movement, e.g. a price low is not accompanied by a low of the MACD." The article says that in practice the second definition is often preferred.^[1]

"Histogram" is overloaded the same way. Appel used it for bar plots of the basic MACD series, where "the height of the bar corresponds to the MACD value", while the common modern usage is the bar chart of the MACD-minus-signal difference. Again the article notes the second is usually preferred. An answer about "the histogram" is ambiguous unless it says which one.^[1]

A signal-line crossover happens "when the MACD and average lines cross; that is, when the divergence (the bar graph) changes sign." The conventional reading is "a recommendation to buy if the MACD line crosses up through the average line… or to sell if it crosses down."^[1]

A zero crossover is a different event: "the MACD line crosses the horizontal zero axis… This happens when there is no difference between the fast and slow EMAs of the price series." The article explicitly ranks them: zero crossovers "provide evidence of a change in the direction of a trend but less confirmation of its momentum than a signal line crossover." Treating the two as interchangeable signals loses that distinction.^[1]

Source 3 hedges its own most common signal. “Due diligence is required before relying on these common signals.” “Signal line crossovers at positive or negative extremes should be viewed with caution.” and “Volatility in the underlying security can also increase the number of crossovers.”^[3]

It publishes a losing example beside the winning one — for one stock “There were eight signal line crossovers in six months: four up and four down. There were some good signals and some bad signals.”, and for another “these signals would have resulted in numerous whipsaws because strong trends did not materialize after the crossovers” This page carries no backtest of its own and takes no position on whether any crossover rule is profitable.^[3]

The article does not present the MACD as predictive. "Since the MACD is based on moving averages, it is a lagging indicator." It adds that the MACD "is less useful for stocks that are not trending (trading in a range) or are trading with unpredictable price action", and — bluntly — "Hence the trends will already be completed or almost done by the time MACD shows the trend."^[1]

On false signals it is equally plain. "Like any forecasting algorithm, the MACD can generate false signals", and a filter (for example requiring a crossover to hold for three days) has a price: "this reduces the probability of false signals but increases the frequency of missed profit." That trade-off is stated by the source, not inferred here.^[1]

Whether any of these readings produce a profit is not addressed by this page. The article records the conventional interpretations; it does not test them. This page carries no backtest figures and makes no judgement about whether the indicator works.^[1]

This page rests on two encyclopedia articles and one charting platform's own documentation. Appel's own writing was not consulted.^[1][2][3]

Vendor limitation: source 3 is StockCharts describing the indicator as it implements and teaches it. Its parameter advice and its cautions are that platform's guidance, not an industry standard, and its chart examples were not independently checked.^[3]

Not established: whether any MACD rule is profitable; the PPO's definition and whether it solves the comparability problem in practice; the numeric ranges quoted for a $20 and a $100 stock, which are source 3's illustration rather than a measurement this page verified.^[1][2][3]

Retrieved 2026-09-28. Source 3 HTTP 200, read in full (176 lines); 24 quotations from it were each searched for in the fetched text before publication.^[3]

Source 3 warns that the divergence signal appears most often exactly where it misleads: “Divergences should be taken with caution. Bearish divergences are commonplace in a strong uptrend, while bullish divergences occur often in a strong downtrend.” — and it anticipates the reader's double take: “Yes, you read that right.”^[3]

The reason given is mechanical, not mystical: a strong advance produces a surge in momentum, and the trend then continuing at a slower pace makes the MACD fall from its highs while upside momentum still outpaces downside.^[3]