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Divergence in trading is the contradiction between price action and indicators on the chart. This conflict of price and technical indicators is one of the strongest signals in trading.
- “Bullish Divergence”: A bullish divergence is created when the price action is moving lower on the chart, while your indicator of choice is creating higher lows. If you see this setting up on the chart, A trader should begin looking for opportunities to get long position.
- “Bearish Divergence”: A bearish divergence is created when the price action is moving higher, while your indicator choice is making lower highs. If you seeing this sort of discrepancy on the chart, You should begin looking for opportunities to open a short position.
- “Hidden Bullish Divergence”: A hidden bullish divergence is created when the price action is moving higher on the Chart, while your indicator of choice is creating lower Lows. If you see this setting up on the chart, A trader should begin looking for opportunities to get long
- “Hidden Bearish Divergence”: A hidden bearish divergence iscreated when the price action is moving lower, while your indicator of choice is creating higher highs. If you see this setting up on the chart, a trader should begin looking for opportunities to get a short position.
Positive Divergence in MGL (Daily Chart)
Can be: 859, 886 & 913.
Looks weak below: 805.
Used Retracement to draw level.
Previous Gap’s Resistance in BHARTIARTL (Daily Chart)
Looks Good above: 370.
Can be: 381, 403 & 424.
Looks weak below: 370.
Can be: 349, 328 & 307
Used Retracement to draw level.
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