Stocks Divergence Example

Divergence trading has 2 setups & these are bullish and bearish divergence set-ups. For each of these stocks setups there is also classic divergence and hidden divergence, these stocks setups are explained below.

RSI indicator is one of the commonly used divergence trading indicator. This stocks indicator is an oscillator similar to the RSI & it can be used to trade divergence setups just the same way as the RSI indicator.

RSI Stocks Trading Divergence Example

RSI Stocks Indicator Divergence Example

RSI Bullish Divergence Example

Classic RSI Bullish Stock Trading Divergence Setup

RSI classic bullish divergence occurs when price is making lower lows ( LL ), but the RSI technical trading indicator is making higher lows ( HL ).

Stocks Classic Bullish Divergence - RSI Stocks Divergence Example

RSI classic bullish divergence setup warns of a possible change in the stocks trend from down to up. This is because even though the stocks price went lower the volume of sellers that pushed the stocks price lower was less as illustrated by the RSI technical indicator. This is an technical indicator of the underlying weakness of the downwards trend.

Hidden RSI Bullish Stocks Trading Divergence Setup

Forms when price is making a higher low ( HL ), but the RSI technical trading indicator is showing a lower low ( LL ).

RSI hidden bullish divergence occurs when there is a retracement in an upwards stock trend.

Stocks Hidden Bullish Divergence - RSI Stocks Divergence Example

This divergence example setup confirms that a retracement move is complete. This RSI divergence setup indicates underlying strength of an upward stock trend.

RSI Bearish Divergence Example

Hidden RSI Bearish Stock Trading Divergence Setup

Forms when price is making a lower high ( LH ), but the oscillator technical indicator is showing a higher high ( HH ).

Hidden bearish divergence set-up forms when there's a retracement in a downwards trend.

Stocks Hidden Bearish Divergence - RSI Stocks Divergence Example

This divergence example setup confirms that a retracement move is complete. This divergence indicates underlying strength of a downward stock trend.

RSI Classic bearish Stocks Trading Divergence Setup

RSI classic bearish divergence occurs when price is making a higher high ( HH ), but the RSI technical trading indicator is making lower high ( LH ).

Stocks Classic Bearish Divergence - RSI Stocks Divergence Example

RSI Classic bearish divergence warns of a possible change in stocks trend from up to down. This is because even though the stocks price went higher the volume of buyers who pushed the stocks price higher was less as illustrated and shown by the RSI trading technical indicator. This is an technical indicator of the underlying weakness of the upwards trend.