What is a bullish divergence?

by ena.rippin , in category: Stocks and Equities , 9 months ago

What is a bullish divergence?

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1 answer

by cornelius.fay , 8 months ago


A bullish divergence is a technical analysis pattern that occurs when there is a disagreement between the price of an asset and an associated indicator, suggesting a potential reversal of the current downtrend or a continuation of an uptrend. It occurs when the price makes lower lows while the indicator makes higher lows, indicating that the momentum of the downtrend is weakening and a reversal might be imminent. This pattern can be observed in various indicators, such as the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), or Stochastic Oscillator. Traders often consider a bullish divergence to be a possible buying opportunity.