Volume and Open Interest
■ (^) Bearish divergence can only occur in an uptrend, indicating a possibility of a
potential downside reversal in the trend.
See Figure 6.4.
In Figure 6.5, we observe bullish volume divergence as Isis Pharmaceuticals
traces out a bullish rounding bottom. This is an example of divergence providing
additional evidence of a bullish chart formation.
fIgure 6.4 Volume Divergence and Confirmation.
fIgure 6.5 Bullish Volume Divergence on the Daily Chart of Isis Pharmaceuticals Inc.
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