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Wednesday, August 08, 2007 9:51:05 PM
** Quick Chart Lesson: Positive Divergences **
I cam across this chart, and thought I'd make a quick lesson out of it...
What is a positive divergence? Positive divergences occur when the price is either consolidating or slowly drifting downards, BUT an indicator is trending UP. (the opposite is the case for a negative divergence)
In the ASWD chart below, look between the yellow lines and notice how the price is basically just sitting there... now look at the RSI(2)... notice how it is trending up? BOO-YA!!
Whenever you come across a positive divergence, it needs to go on your watch list... these enable you to "prepare" for big moves before they occur...
Any questions? Please post them or send me a PM.
I cam across this chart, and thought I'd make a quick lesson out of it...
What is a positive divergence? Positive divergences occur when the price is either consolidating or slowly drifting downards, BUT an indicator is trending UP. (the opposite is the case for a negative divergence)
In the ASWD chart below, look between the yellow lines and notice how the price is basically just sitting there... now look at the RSI(2)... notice how it is trending up? BOO-YA!!
Whenever you come across a positive divergence, it needs to go on your watch list... these enable you to "prepare" for big moves before they occur...
Any questions? Please post them or send me a PM.
Need an Annotated Chart? Stop by my board -- http://investorshub.advfn.com/boards/board.aspx?board_id=8765
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