Banknifty Professional Trading Setup

Here are some things to know about the MACD histogram and divergences:
Divergence

A divergence occurs when the price action and momentum are not acting together. For example, if the price is making lower highs, but the histogram is making higher lows, this is a divergence.

Types of divergences
There are two types of divergences: peak-trough and slant.

Bullish divergence
A bullish divergence occurs when the MACD forms two rising lows that correspond to two falling lows in the price.

Bearish divergence
A bearish divergence occurs when the MACD forms two falling highs that correspond to two rising highs in the price.

Histogram bars

The length of the histogram bars indicate the relationship between the two moving averages. When the moving averages are moving away from each other, the bars are longer, and when they are getting closer, the bars are shorter.

MACD
The MACD is a momentum indicator that shows the relationship between two moving averages of prices. It's calculated by taking the difference between a 26-day and 12-day exponential moving average.