What will we cover?
In this tutorial we will calculate and visualize the MACD for a stock price.
Step 1: Retrieve stock prices into a DataFrame (Pandas)
Let’s get started. You can get the CSV file from here or get your own from Yahoo! Finance.
import pandas as pd import matplotlib.pyplot as plt %matplotlib notebook data = pd.read_csv("AAPL.csv", index_col=0, parse_dates=True)
Step 2: Calculate the MACD indicator with Pandas DataFrame
First we want to calcite the MACD.
The calculation (12-26-9 MACD (default)) is defined as follows.
- MACD=12-Period EMA − 26-Period EMA
- Singal line 9-Perioed EMA of MACD
Where EMA is the Exponential Moving Average we learned about in the last lesson.
exp1 = data['Close'].ewm(span=12, adjust=False).mean()exp2 = data['Close'].ewm(span=26, adjust=False).mean()data['MACD'] = exp1 - exp2data['Signal line'] = data['MACD'].ewm(span=9, adjust=False).mean()
Now that was simple, right?
Step 3: Visualize the MACD with matplotlib
To visualize it you can use the following with Matplotlib.
fig, ax = plt.subplots() data[['MACD', 'Signal line']].plot(ax=ax) data['Close'].plot(ax=ax, alpha=0.25, secondary_y=True)
Resulting in an output similar to this one.
Want to learn more?
This is part of the course of Master Technical Analysis with pandas.
In the next lesson you will learn how to calculate Stochastic Oscillator with Pandas DataFrames.
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