Happy new year to all of you present here…
As we all know there are mainly two types of divergence :-
-
Regular divergence
a. Bullish regular divergence
b. Bearish regular divergence. -
Hidden divergence
a. Bullish hidden divergence
b. Bearish hidden divergence.
Now, in case of bullish regular divergence the price makes LL and the RSI makes HL… this indicates that there is no momentum/strength behind the bearish move… and the price will move up…
Similarly in the case of bearish regular divergence the price makes HH but the RSI makes LH… this indocates that there is no strength behind the bullish move and the price will fall…
But in case of bullish hidden divergence the price makes HL and the RSI makes LL…
And for bearish hidden divergence the price makes LH and RSI maks HH…
What this suggest and how to interpret this…