Divergence (Technical Analysis)

Divergence occurs when price makes a new high or low that isn't confirmed by an oscillator like RSI or MACD — for example, price hits a higher high while the oscillator prints a lower high — signaling that underlying momentum doesn't support the latest price move. Regular divergence is commonly read as a warning of a potential reversal; hidden divergence is read as a signal the existing trend may continue. Divergence is a leading-style signal in a mostly lagging toolkit, but like most single indicators it's more reliable combined with price-action or support/resistance confirmation than traded in isolation.