Price-Oscillator Divergences Explained

A few days ago, I led a webinar on the subject of price-oscillator divergences. There was a lot of interest in the subject, so I thought I would post the chart illustrations of the different kinds of divergences here, along with some explanations:

Bearish Regular Divergence - price makes a higher high while the oscillator makes a lower high. This is a warning or indication of a potential impending bearish reversal after an uptrend.

Bullish Regular Divergence - price makes a lower low while the oscillator makes a higher low. This is a warning or indication of a potential impending bullish reversal after a downtrend.

Bearish Hidden Divergence - price makes a lower high while the oscillator makes a higher high. This is a warning or indication of a potential downtrend continuation.

Bullish Hidden Divergence - price makes a higher low while the oscillator makes a lower low. This is a warning or indication of a potential uptrend continuation.

Subscribe by RSS Subscribe by Email