European bearish divergences
March 5, 2012 Leave a comment
A series of multiple bearish divergence continue to be unresolved on most European markets. (Divergence occurs when the indicator fails to imitate the pattern on the price chart, a sign of trend weakness and likely reversal).
A triple divergence occurs when a divergence has given an incorrect signal. Instead of reversing direction, price has made a new, higher High (in an up-trend) or lower Low (in a down-trend). If the indicator repeats its signal by making another lower High (in an up-trend) or higher Low (in a down-trend), this is an even stronger signal than the original divergence.