Quick Look - Bullish Divergence vs Bearish Divergence

Aug 15, 2023

Here is a graphical representation of the simple concept of bullish and bearish divergences.

Rules are pretty clear

Bearish Divergence

• Happens only in uptrend
  
• Observed on pivot Highs
  
• Price makes higher high whereas oscillator makes lower high, indicating weakness and possible reversal
  

Bullish Divergence

• Happens only in downtrend
  
• Observed on pivot Lows
  
• Price makes lower low whereas oscillator makes higher low, indicating weakness and possible reversal
  

Watch out for hidden divergences on the opposite pivots and breakouts in the direction of trend.