Posted by tayguansong > 2012-11-26 20:34 | Report Abuse

Sorry but I am new in this....can somebody be kind enough to explain what is Divergence???

Posted by davesingh > 2012-11-26 20:59 | Report Abuse

divergence means that the analysts are confused......so they using a new term to explain themselves

Posted by djhchew > 2012-11-26 22:00 | Report Abuse

Tayguansong, Divergence means the price and volume trend lines are going opposite directions. In this chart, you can see that the pricing is going up and the volume is going down. This means you are in a Bearish Market.

Typically, when you see this pattern, it tells you that Mr Market is cashing out or holding cash position. It can also mean that Mr Market is cautious considering certain factors ie: Up and coming GE, US Fiscal Cliff, China slowing down, Euro Financial crisis and etc...

There are 3 more patterns which is another Bearish Pattern and another 2 Bullish Patterns.. Check it out.. :)

Posted by Hong2 > 2012-11-26 22:02 | Report Abuse

djhchew-thanks for sharing. New info to me too.

Posted by djhchew > 2012-11-26 22:22 | Report Abuse

Hong2, not at all.. :)

Posted by gkheng > 2012-11-26 22:22 | Report Abuse

if i m not mistaken, RSI (http://en.wikipedia.org/wiki/Relative_strength_index) slows down here meant the rate of decay is smaller, does not meant the market is recover. recover ned positive up.

Posted by djhchew > 2012-11-26 23:03 | Report Abuse

Gkheng, thanks for pointing out.. its my mistake mistaking the RSI for Volume.. Sorry about that.. :P

When RSI is showing a divergence downwords against an increasing price indicates a trend change is about to happen. In this case, a downtrend is about to happen whereas Stochastic can be used to indicate a rebound.. :)

Posted by Balla Dk > 2012-11-26 23:16 | Report Abuse

FBMKLCI Going to go down more tommorow!!! How nice if we could short the market!!! $$$

Posted by gkheng > 2012-11-30 10:20 | Report Abuse

djhchew, no one is right & wrong. only market is.

Posted by Faznizam Abdullah > 2012-11-30 16:33 | Report Abuse

MA200 @ 1609