A MACD crossover is when the MACD line crosses its signal line. A cross above the signal line is read as bullish momentum, and a cross below it as bearish momentum.
MACD is built from two exponential moving averages, usually 12 and 26 periods. The MACD line is the gap between them. The signal line is a 9-period average of the MACD line itself. When short-term momentum picks up faster than the longer average, the MACD line rises above the signal line.
Traders also watch the zero line. A bullish crossover below zero is an early signal inside a weak trend. A crossover above zero tells you the trend is already positive and momentum is returning after a dip.
Example: on the daily chart of a hypothetical stock near ₹350, the MACD line crosses above the signal line after a three-week fall. A careful trader waits for the price to also close above its recent swing high before acting.
The catch is lag. Because MACD comes from moving averages, crossovers arrive late and give many false signals in sideways markets. If a stock is stuck in a ₹10 range for weeks, ignore its crossovers. Our blog post on the MACD crossover strategy goes deeper into settings, and you can practise reading it on live charts in our technical analysis classes.