Type of Divergence |
Identification |
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|
Classic Bearish |
HH price LH indicator |
Indicates underlying weakness Warning of a possible short- to intermediate-term change in trend from up to down |
|
Classic Bullish |
LL price HL indicator |
Indicates underlying strength Warning of a possible short- to intermediate-term change in trend from down to up |
|
Bearish Hidden |
LH price HH indicator |
Indicates underlying weakness Mainly found during corrective rallies in a downtrend May also occur during retests of a price top |
|
Bullish Hidden |
HL price LL indicator |
Indicates underlying strength Good entry or re-entry Occurs mainly during corrective declines in an uptrend May be found on occasion at price retests of the lows |
|
*HH=Higher High
*LH=Lower High
*LL=Lower Low
*HL=Higher Low