Divergence and Convergence Bullish and Bearish Reversal Analysis
Divergence can also signal a potential trend continuation. A regular bearish divergence can be spotted when the price is making a higher high, but the oscillator is posting a lower high. This could signal that the existing uptrend is running out of momentum and that a retracement might follow. But if we look at the further development of the situation on the market, we will see that the signal is not canceled but simply transferred to another time and market situation. In other words, the signal accumulates, and a double...