MACD vs RSI: Trend-Following vs Momentum Oscillator

MACD is a trend-following measure: the gap between a 12-day and a 26-day exponential moving average, in the security's own price units. RSI is a bounded momentum oscillator: the balance of recent gains and losses on a 0-to-100 scale. Both come from the same closing prices, so they can move together, but they answer different questions and are read on different scales.

What MACD Measures

MACD line = 12-day EMA − 26-day EMA
Signal line = 9-day EMA of the MACD line
Histogram = MACD line − signal line

MACD is positive when the shorter average is above the longer one, which happens when recent closes have been running above the longer trend. The histogram shows whether that gap is widening or narrowing. See MACD.

What RSI Measures

RSI = 100 − 100 ÷ (1 + RS), where RS = average gain ÷ average loss over 14 sessions with Wilder smoothing.

RSI near 100 means recent closes have been mostly gains; near 0, mostly losses; 50 is balanced. See RSI.

MACD Vs RSI: Units And Scale

	MACD	RSI
Type	Trend-following (difference of averages)	Momentum oscillator
Units	Price units (dollars for a US stock)	Index, 0–100
Bounded?	No	Yes
Centre line	0	50
Conventions	Signal-line and zero-line crossovers, divergence	70 "overbought", 30 "oversold"
Comparable across securities?	Not directly	Yes, on the same scale

Because MACD is measured in price, a $500 stock shows a larger MACD than a $50 stock for the same percentage move. One way to put it on a common footing is to divide by price: MACD ÷ close gives the gap between the averages as a percentage.

Illustrative example: a $200 stock with a 12-day EMA of 204 and a 26-day EMA of 200 has a MACD of 4.00, or 2% of the price. A $20 stock with averages of 20.40 and 20.00 has a MACD of 0.40, also 2%.

RSI needs no such step. An RSI of 65 means the same balance of gains to losses on any security, although how unusual 65 is still varies by security, which is why Vyreon also reports RSI's percentile against the security's own past year.

How MACD And RSI Complement Each Other

Direction vs one-sidedness: MACD's sign says whether the shorter-term trend sits above or below the longer one. RSI says how one-sided recent closes have been.
Bounded vs unbounded: RSI flattens near its limits during a long run in one direction; MACD keeps growing as long as the averages keep separating.
Speed: RSI(14) responds to the last few weeks of closes. MACD, built from 12-, 26- and 9-day averages, responds more slowly and lags further behind the price.

They can disagree. In a steady, gentle uptrend MACD can stay positive while RSI drifts near 50 with mixed days. After a sharp one-week drop inside a longer uptrend, RSI can fall below 30 while MACD is still positive but shrinking.

Neither confirms the other in any strict sense: they are two summaries of the same closes, not independent evidence.

How Vyreon Calculates Them

MACD(12, 26, 9): the MACD line, signal line, histogram and both EMAs. Each EMA uses α = 2 ÷ (n + 1), seeded with the simple average of its first n values.
Wilder RSI(14), its condition by the 70/30 convention, its 252-session percentile and the number of sessions in the current condition.
Both use daily closes adjusted for splits and dividends.

What They Do Not Tell You

Both describe past closes and lag them. Neither predicts the next move.
Crossovers, divergences and thresholds are conventions, not rules.
Neither uses volume; the money flow index and on-balance volume do.

Related: MACD · RSI · RSI vs stochastic · SMA vs EMA · ADX

Sources

Gerald Appel, who developed MACD in the late 1970s; Technical Analysis: Power Tools for Active Investors (FT Press, 2005).
J. Welles Wilder Jr., New Concepts in Technical Trading Systems (1978): RSI and Wilder smoothing.
John J. Murphy, Technical Analysis of the Financial Markets (New York Institute of Finance, 1999): general reference for both indicators and their conventional readings.