Does the MACD crossover predict a rally?
No. Since 1995, US stocks on the day their MACD crossed above its signal line beat the same day's median stock over the next week 49 times in 100, a faint lag; a coin flip gives 50. The bearish cross: 50, no measurable edge. Neither cross tells which stocks go on to do better.
The paper
The full study: its data, method, robustness, limits and sources.
Opulence Alpha Research · Published Sep 25, 2026 · Data through Aug 21, 2026
Keywords: MACD crossover, does MACD work, MACD signal line cross, MACD histogram, MACD backtest, MACD strategy stocks·JEL classification: G11, G12, G14, C12, C58
- Universe
- The same for every study: 1,767 US common stocks in the 11 GICS sectors, 422 of them since delisted; S&P 500 members since 1996 plus large and mid-sized companies outside the index
- Period
- Every Wednesday from Jan 4, 1995 to Aug 19, 2026: 1,634 Wednesdays across 7,959 trading sessions
- Sample
- n = 1,763 stocks of the 1,767-stock universe; 1,889,758 stock-weeks, a median of 1,148 stocks per Wednesday
- Outcome
- Return over the next 1, 5, 21 and 63 trading sessions against the same day's median stock
- Inference
- t on non-overlapping dates; proven only when |t| ≥ 3 and the same sign in at least 60% of years
1Introduction
Gerald Appel's MACD subtracts a 26-day exponential average of the price from a 12-day one and compares the result with its own 9-day average, the signal line. When the MACD crosses above the signal line, chart readers take it as a bullish turn in momentum and a cross below as a bearish one; the gap between the two, printed as a histogram, is read as the strength of the move. This study asks whether stocks that print a bullish cross, or a high histogram, go on to beat other stocks over the following week, and whether stocks that print a bearish cross go on to trail them.
2Data and method
2.1Sample design
Population and frame. The population is US common stocks listed on the NYSE and Nasdaq; funds, ETFs, trusts, preferred shares, warrants and units are excluded. The sampling frame is a fixed universe of 1,767 companies, drawn once when the platform was built and not re-sampled since, in two strata. Stratum 1 is a census of the S&P 500: every company in the index at any time since 1996 whose price history could be recovered, 1,027 companies of which 413 have since delisted; it holds 76% of the index's members in 1996 and at least 96% in every year from 2010. Stratum 2 is 740 large and mid-sized companies outside the index, selected in proportion to the market's sector weights from the stocks that passed a minimum share price of $15 and a minimum average daily trading value of $25 million; 9 of them have since delisted.
Sample. The unit of observation is a stock-week: one stock on one Wednesday. A stock enters a Wednesday's cross-section when it has a valid close that day, a value of the signal and a measured outcome; bars flagged as bad data and returns that cross a change of issuer are left out. This study's sample is n = 1,763 stocks of the 1,767: 1,889,758 stock-weeks on 1,634 Wednesdays from Jan 4, 1995 to Aug 19, 2026, a median of 1,148 stocks per Wednesday (range 820 to 1,371). 331,954 stock-weeks (17.6%) come from the 422 companies that have since delisted. Every stock and every Wednesday carries equal weight.
Representativeness. Table 1 gives the sample by GICS sector beside the S&P Composite 1500: 7.9% of companies would have to change sector for the two to match exactly. By latest market value, 55% of the active companies are large (at least $10bn), 38% mid ($2–10bn) and 6% small. Because Stratum 2 was chosen from companies listed at construction, its history carries survivorship bias. Section 4 repeats the lead result among the stocks that were S&P 500 members on each date, the part of the sample largely free of that bias.
Companies in this study's sample, of them those since delisted, the size of the active companies, the sample's share of stock-weeks and the sector's share of the S&P Composite 1500.
| Sector | Sample | Delisted | Large | Mid | Small | Stock-weeks | S&P 1500 |
|---|---|---|---|---|---|---|---|
| Information Technology | 282 | 67 | 122 | 76 | 18 | 13.9% | 12.7% |
| Financials | 256 | 60 | 114 | 74 | 8 | 14.6% | 17.2% |
| Industrials | 255 | 53 | 126 | 67 | 11 | 15.9% | 17.5% |
| Health Care | 237 | 47 | 92 | 81 | 16 | 12.4% | 10.9% |
| Consumer Discretionary | 209 | 39 | 69 | 87 | 12 | 12.3% | 12.9% |
| Energy | 105 | 30 | 39 | 31 | 5 | 5.9% | 4.7% |
| Consumer Staples | 101 | 38 | 40 | 17 | 5 | 5.9% | 4.9% |
| Materials | 94 | 34 | 35 | 24 | 2 | 5.6% | 5.1% |
| Real Estate | 84 | 10 | 40 | 32 | 2 | 5.7% | 6.9% |
| Communication Services | 80 | 31 | 28 | 13 | 5 | 3.9% | 3.3% |
| Utilities | 60 | 13 | 35 | 12 | 0 | 4% | 4% |
| All sectors | 1,763 | 422 | 740 | 514 | 84 | 100% | 100% |
Sample: n = 1,763 of the 1,767 companies. Size by latest market value for the 1,338 active companies with one: large ≥ $10bn, mid $2–10bn, small < $2bn. S&P 1500 shares count the constituents of the S&P 500, MidCap 400 and SmallCap 600 (1,506 companies, lists read Sep 25, 2026). Sectors are each company's current GICS sector.
2.2Signals
| Signal | Definition | Since | Wednesdays |
|---|---|---|---|
| Bullish MACD cross | The MACD (12-day minus 26-day exponential average) crosses above its 9-day signal line, counted on the day it happens | Jan 4, 1995 | 1,633 |
| Bearish MACD cross | The MACD crosses below its 9-day signal line, counted on the day it happens | Jan 4, 1995 | 1,631 |
| MACD histogram | The MACD minus its signal line, in price units; stocks ranked into fifths each Wednesday | Jan 4, 1995 | 1,634 |
2.3Measurement
Outcome. The return from the close on the Wednesday to the close 1, 5, 21 and 63 trading sessions later, on closes adjusted for splits and dividends, compared with the same day's median stock; half of all stocks beat the median by construction, so chance is 50 in 100 on every date. No delisting return is added.
Each Wednesday, the stocks showing the reading are scored against the same day's median stock. A state counts on every Wednesday it holds; a cross or breakout counts only on the Wednesday it happens.
Each Wednesday the stocks are ranked on the signal. The study reports how often each fifth of that ranking beat the median stock, and the rank correlation (IC) between the signal and the return that followed.
The t-statistic uses non-overlapping dates only. A result is called proven when |t| is at least 3, it held in at least 60% of years and it is large enough to matter; with 1,470 tests across the studies, a looser bar would pass dozens by luck.
Full data and methods3Results
Figure 1 reads every horizon for both crosses. The bullish cross beat the median stock 49 times in 100 over the next session, 49 over the next week, 50 over the next month and 50 over the next three months: a faint lag at the two short horizons, not reliable on its own, and a coin flip beyond them. The bearish cross, its mirror, beat the median stock 50, 50, 50 and 50 times in 100 over the same horizons, with no measurable edge at any of them. Out of every 100 stocks that printed a bullish cross, 49 beat the median stock over the following week; out of every 100 that printed a bearish cross, 50 did (Figure 2).
Share of stocks showing the reading that beat the same day's median stock, by horizon. The line at 50 is chance, the grey band the range chance alone produces; a filled square is a proven relation.
Every Wednesday the stocks are cut into fifths on the signal, lowest to highest; bars show how often each fifth beat the same day's median stock over the next week. The dashed line is chance.
Next week.
Next week, three-session return against the industry; the same way in 32 of 32 years.
Rank correlation between the signal and the return that followed, with its 95% interval. An interval that crosses zero is no relation.
Each square is one calendar year; filled = a year in which the average stock showing the signal lagged the median stock over the next week. Years are counted, not shown in order.
A signal with an edge would fill most squares, or leave most empty.
Rank correlation inside each GICS sector over the next week, stocks ranked only against their own sector. Colour only where |t| ≥ 2.
Figures 3 and 4 rank every stock each Wednesday on the MACD histogram itself, the gap between the MACD and its signal line. The fifth with the highest histogram, the strongest bullish reading, beat the median stock over the next week 49 times in 100; the fifth with the lowest, 51. Their average returns over the week, measured against the average stock, were -0.21 and 0.04 points. The rank correlation over the week was -0.018 (t -6.9), negative in 28 of 32 years: small, steady, and against the reading. It is strongest at the week (Figure 4).
4Robustness
Table 3 reads each cross horizon by horizon: over the next week the bullish cross lagged the median stock in 22 of 32 years, and the bearish cross beat it in 21 of 32, too weakly on average to count as an edge. Table 4 tests the histogram: its negative relation held in 3 of 3 decades, in 11 of 11 sectors and among S&P 500 members on the date (-0.013, t -3.9).
Share that beat the median stock, its t-statistic on non-overlapping dates, and the years in which it pointed the same way.
| Horizon | Beat the median | t | Years, same way |
|---|---|---|---|
| Bullish MACD cross, session | 49.2 | -3.9 | 24 / 32 |
| Bullish MACD cross, week | 49.3 | -3.2 | 22 / 32 |
| Bullish MACD cross, month | 49.8 | -1.8 | 18 / 32 |
| Bullish MACD cross, three months | 49.8 | -0.5 | 19 / 32 |
| Bearish MACD cross, session | 50.1 | 0.3 | 13 / 32 |
| Bearish MACD cross, week | 50.2 | 0.5 | 21 / 32 |
| Bearish MACD cross, month | 49.9 | -0.2 | 13 / 32 |
| Bearish MACD cross, three months | 49.7 | -0.1 | 19 / 32 |
Rank IC and its t-statistic on non-overlapping dates.
| Sample | IC | t | Wednesdays |
|---|---|---|---|
| MACD histogram, next week | |||
| All stocks, whole period | -0.0180 | -6.9 | 1,633 |
| By decade: 1995–2004 | -0.0300 | -6.8 | 516 |
| By decade: 2005–2014 | -0.0152 | -3.7 | 518 |
| By decade: 2015– | -0.0101 | -2.1 | 599 |
| S&P 500 members on the date | -0.0134 | -3.9 | 1,581 |
| Sectors with the overall sign | 11 / 11 |
5Limitations
- The histogram is measured in price units, as charting screens print it, not scaled by the share price, so its fifths mix the strength of a move with the level of the price; a scaled version could rank stocks differently.
- A cross is counted only when it happens on a Wednesday, the day the studies observe; crosses on other days are not in the sample, which leaves fewer events than a daily count would.
- Before costs. Averages exclude trading costs, taxes and market impact.
- Same-close timing. Returns start at the close the signal is computed from; a real trade would start later.
- Survivors among smaller companies. The non-index names were chosen from companies listed when the universe was built; no delisting returns are added.
6Conclusion
The MACD crossover restates a move the price has already made. Measured against the same day's median stock, stocks that printed a bullish cross did not go on to beat other stocks, and stocks that printed a bearish cross did not go on to trail them. The histogram behind the cross carried a small, steady relation, but in the other direction: the strongest readings tended to be followed by slightly weaker weeks. As a guide to which stocks lead next, the indicator's usual reading does not hold in this data.
References
- Appel, G. (2005). Technical Analysis: Power Tools for Active Investors. FT Prentice Hall.
- Brock, W., Lakonishok, J. and LeBaron, B. (1992). Simple Technical Trading Rules and the Stochastic Properties of Stock Returns. Journal of Finance 47(5).
- Park, C.-H. and Irwin, S. H. (2007). What Do We Know About the Profitability of Technical Analysis? Journal of Economic Surveys 21(4).
- Benjamini, Y. and Hochberg, Y. (1995). Controlling the False Discovery Rate: A Practical and Powerful Approach to Multiple Testing. Journal of the Royal Statistical Society, Series B 57(1).
- Grinold, R. C. and Kahn, R. N. (2000). Active Portfolio Management, 2nd ed. McGraw-Hill.
- Harvey, C. R., Liu, Y. and Zhu, H. (2016). … and the Cross-Section of Expected Returns. Review of Financial Studies 29(1).
- Shumway, T. (1997). The Delisting Bias in CRSP Data. Journal of Finance 52(1).
Appendix A. Questions readers ask
- Does the MACD crossover work?
- Not as a forecast. Since 1995, US stocks on the day their MACD crossed above its signal line beat the same day's median stock over the next week 49 times in 100 and over the next month 50 times, against 50 for a coin flip. The week's shortfall is faint and not reliable on its own; the month shows no measurable edge.
- Does a bearish MACD cross predict a fall?
- Not in the data. Stocks on the day their MACD crossed below its signal line beat the median stock over the next week 50 times in 100 and over the next month 50: no measurable edge in either direction.
- Is a high MACD histogram bullish?
- Not across US stocks. Ranked every Wednesday, the fifth with the highest histogram beat the median stock over the next week 49 times in 100 and the fifth with the lowest 51. The relation is small but steady, and it runs against the usual reading: stocks with the strongest reading tended to have a slightly weaker week than other stocks, not a stronger one.
- How was the MACD crossover measured?
- Every Wednesday from Jan 4, 1995 to Aug 19, 2026, the stocks whose MACD (the 12-day minus the 26-day exponential average) crossed its 9-day signal line that day were compared with the same day's median stock over the next 1, 5, 21 and 63 trading sessions, on the same universe of 1,767 US stocks every study uses.
Data availability and citation
Every figure in this paper is quoted from one frozen snapshot, published as JSON with the sample description, the robustness results and the test counts. The same snapshot feeds the research console, so the two cannot disagree.
Opulence Alpha Research (2026). Does the MACD crossover predict a rally? Opulence Alpha Studies, Sep 25, 2026. https://opulencealpha.ai/studies/macd-crossover
Research, not advice. A measured tendency across hundreds of stocks is a nudge for any one of them, never a forecast of its price.