The MACD indicator is essentially a momentum indicator that shows the relationship between two different moving averages of price. The MACD is the difference between the 12-period Exponential Moving Average (EMA) and the 26-period EMA.

The MACD line is created by taking the difference between the 12-period EMA and the 26-period EMA. The MACD line is plotted along with the signal line, which is an EMA of the MACD line itself. The signal line is typically used as a trigger for buy and sell signals when it crosses over the MACD line.