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Technical Analysis

Divergence

When price and an indicator move in opposite directions.

Full Definition

Divergence occurs when price makes a new high or low, but an indicator (like RSI or MACD) does not confirm with a corresponding high or low. Bullish divergence (price lower low, indicator higher low) suggests weakening selling pressure. Bearish divergence (price higher high, indicator lower high) suggests weakening buying pressure. Divergence often precedes reversals.

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