Read RSI as a transformation of price changes
RSI compares smoothed upward and downward price changes over a selected lookback. Its scale runs from zero to 100. Common reference levels are 70 and 30, often called overbought and oversold. Those labels describe the indicator, not an obligation for price to reverse.
Given hypothetical smoothed average gains of 2 and losses of 1, the ratio is 2. The expression 100 − 100/(1 + 2) gives RSI of about 66.67. This supplied-input example does not show the full initialization and smoothing of a real series. State those choices when calculating one.
Keep the MACD line, signal and histogram separate
A common MACD setup subtracts a 26-period exponential moving average from a 12-period one. The signal line is a 9-period exponential average of MACD. The histogram is MACD minus that signal. Other settings exist; periods are not necessarily days.
If the fictional fast average is $103 and the slow average $100, MACD is $3. With a signal line of $2.50, the histogram is $0.50. A positive histogram means MACD is above its signal; it does not establish that MACD itself just crossed zero.
Name the comparison you mean
RSI is different from a relative-performance comparison between a security and a benchmark. MACD is not bounded to the RSI scale and generally uses price units. Neither should be described as an independent business valuation or as a direct count of advancing stocks.
A price can make a higher high while an oscillator makes a lower high. That is a stated divergence under specified observations. In a strong trend RSI can stay elevated, and a moving-average-based indicator can change only after the prices in its calculation change. A divergence is a question to investigate.
Avoid counting the same evidence repeatedly
RSI, MACD and a moving average may all depend on the same closing-price history. Agreement among them does not automatically supply three independent confirmations. Inspect what each adds and whether the proposed combination was specified before examining results.
For a learning exercise, record interval, lookback, smoothing and signal definition, then label several crossings without looking ahead. Retain whipsaws and costs if turning the exercise into a strategy test. Chart reading can explain an indicator accurately without claiming that its conventional thresholds provide an edge.
MACD is −1 and its signal line is −2. What is its histogram, and is MACD above zero?
Show the explanation
The histogram is −1 − (−2) = +1. MACD is above its signal line but remains below zero. These are different comparisons.
Sources and editorial notes
Original explanations and hypothetical examples prepared with AI assistance. Primary references checked October 16, 2026. Numerical examples are hypothetical unless explicitly identified otherwise.
- Fidelity: Relative Strength Index
RSI formula, bounded scale, conventional 70/30 reference levels and persistence in strong trends.
- Fidelity: Moving Average Convergence/Divergence
Common 12/26/9 EMA settings, line/signal distinctions and whipsaws. Supplied-input arithmetic and histogram example are original.