How do you interpret the MACD (Moving Average Convergence Divergence) technical analysis indicator?

The MACD is a great indicator but like most, it is a lagging indicator. The MACD crossing above the 0 line is a good long entry. The MACD crossing below the 0 line is a good sell or short entry.

Where things really get interesting is if you use the MACD with the stochastic indicator. A good long signal is to use the MACD 12, 26, 5 with the stochastic 14,3.