MACD Signal Crossover Explained

A signal crossover occurs when the MACD line crosses the signal line. A bullish signal crossover occurs when the MACD line crosses above the signal line, and a bearish signal crossover occurs when the MACD line crosses below the signal line.

A bullish signal crossover is commonly discussed in relation to potential upward momentum, while a bearish signal crossover is commonly discussed in relation to potential downward momentum, reflecting a shift in the relationship between the MACD line and its own smoothed reference.

Signal crossovers are generally described as the most frequent type of MACD signal, meaning they can occur relatively often, including during choppy or range-bound conditions (covered in the Market Guides module), where multiple crossovers might occur without a sustained directional move developing — similar to the "whipsaw" concept covered in the moving average crossover lesson.