Stock Meadow · Metric glossary · Price trend
MACD Histogram: formula and how to read it
The MACD (moving average convergence divergence) was created by Gerald Appel in the 1970s. Its histogram shows whether short-term momentum is stronger or weaker than it was a few days ago, which is why traders watch it for early changes in a trend. Stock Meadow divides it by the price so stocks of any price can be compared.
What is MACD Histogram?
Whether short-term momentum is building or fading, relative to the price. The MACD (12, 26, 9) histogram divided by the latest close. The histogram is the gap between the MACD line (the 12-day minus the 26-day exponential moving average) and its own 9-day average. Above zero means short-term momentum is stronger than its recent average; below zero, weaker.
Stock Meadow groups it under Price trend, and shows it in tables as MACD hist %.
Formula and a worked example
MACD line = 12-day EMA − 26-day EMA; signal line = 9-day EMA of the MACD line; histogram = MACD line − signal line; MACD histogram % = histogram ÷ latest close
If the MACD line is 1.50, the signal line is 1.10 and the stock closes at $50, the histogram is 0.40 and the metric is 0.40 ÷ 50 = 0.8%. The numbers are made up for illustration.
How to read it
Above zero, short-term momentum is stronger than its own recent average; below zero, it is weaker. A histogram that shrinks toward zero while still positive means the upward push is fading. A higher figure scores better.
When Stock Meadow ranks stocks, a higher figure scores better.
Common pitfalls
- It is built from moving averages, so it lags the price and gives mixed signals when the stock moves sideways.
- It describes momentum, not value: a rising histogram says nothing about whether the price is fair.
- Needs about 34 trading days of prices, so it is blank for very recent listings.
How Stock Meadow handles gaps. Usually blank when there are fewer than 34 days of prices.
Treat any single metric as one clue, and read the company's financial statements before drawing a conclusion. Stock Meadow's figures are research tools based on reported data, not investment advice.
Stock Meadow models that use it
In Weighted ranking, Z-score composite and Balanced (no weak link), you choose the metrics and weights yourself, so you can include it in a custom score.
No fixed-recipe model scores it.
Read about every scoring model in How scores work.
Frequently asked questions
- What does the MACD histogram show?
- It is the gap between the MACD line and its 9-day average. Bars above zero mean momentum is stronger than its recent average, bars below zero mean it is weaker, and the size of the gap shows how quickly that is changing.
- Why divide the histogram by the price?
- The raw histogram is in dollars, so a $500 stock would always look more extreme than a $20 one. Dividing by the price puts every stock on the same percentage scale.
- Is a higher or lower MACD hist % better?
- When Stock Meadow ranks stocks, a higher figure scores better. That is a ranking convention, so read MACD hist % alongside other measures and compare similar companies.
- Why is MACD hist % blank for some stocks?
- It is usually blank when there are fewer than 34 days of prices. Stock Meadow leaves the figure blank rather than guessing it.
Use MACD hist % in Stock Meadow
Filter on MACD histogram (% of price), score it in the stock scoring model, and see how every stock compares. Sign up free, no card needed.
Open the stock scoring model