The MACD is usually drawn as two lines and a histogram below the graph as seen in Figure 3.1. These are used by traders to predict buy and sell signals. The blue line represents the MACD line, and when this crosses the zero mark or the signal line (indicated in red), a buy/sell signal is given. Again, as seen in Figure 3.1, when the MACD line crosses to above the signal line, the stock tends to increase, so the signal is to buy. Likewise, when the MACD line falls below the signal line, a trader should likely sell the stock [4]. The MACD line can also indicate trends. When the MACD line crosses above the center zero line, this indicates an uptrend, and similarly, a downtrend is when the MACD line crosses below the center line [4]. The signal line can tend to generate many false signals in short-term trading, and the MACD line is used more by traders to determine when a stock is trending [4]. Calculating the MACD line is an important tool in countertrend trading because it predicts that a change is about to happen, which allows traders to more accurately guess the lows and highs of a trending stock [4].