Hi GinoE.
Classic divergence usually "works" because of changes in momentum - which are not easy to see by eyeballing changes in price of a stock. You can get a lower low in a stock price but momentum hasn't increased at the same rate as the drop in the price and vice versa - you can get a higher price in a stock but momentum may have slowed - so you get a negative divegence.
Momentum must slow before a rising price can reverse to the downside , e.g., a car coasting up hill after a steep fall, will slow (momentum drops) before it goes back down the hill.
Momentum is often measured by such indicators as MACD, RSI. Possibly, Rate of Change% is better but rarely used.
I've never seen a satisfactory explanation why hidden divergence "works".
But my own observations suggest that it "works" because of recent prior history. If a relatively long up-trend has a steady Rate of Change% then action can quickly produce a lower low on indicators if the ROC% descent is a bit more rapid than prior history.
So, if a hidden divergence is to occur, there will probably be a negative or steady ROC% on the previous rise.
That's complicated stuff - but I hope it helps.
- Forums
- Charts
- IMUGENE CHART. TA only
Hi GinoE.Classic divergence usually "works" because of changes...
- There are more pages in this discussion • 3,676 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add IMU (ASX) to my watchlist
(20min delay)
|
|||||
Last
6.2¢ |
Change
-0.003(3.91%) |
Mkt cap ! $464.8M |
Open | High | Low | Value | Volume |
6.4¢ | 6.5¢ | 6.1¢ | $1.351M | 21.57M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
10 | 314791 | 6.1¢ |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
6.2¢ | 908320 | 23 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
65 | 4143452 | 0.060 |
18 | 2164443 | 0.059 |
14 | 2093236 | 0.058 |
4 | 270174 | 0.057 |
7 | 743588 | 0.056 |
Price($) | Vol. | No. |
---|---|---|
0.061 | 480170 | 15 |
0.062 | 1006628 | 19 |
0.063 | 1289202 | 5 |
0.064 | 996623 | 5 |
0.065 | 1735538 | 8 |
Last trade - 12.19pm 04/06/2024 (20 minute delay) ? |
|
|||||
Last
6.1¢ |
  |
Change
-0.003 ( 4.69 %) |
|||
Open | High | Low | Volume | ||
6.4¢ | 6.5¢ | 6.1¢ | 12126930 | ||
Last updated 12.43pm 04/06/2024 ? |
Featured News
IMU (ASX) Chart |