Divergence Analysis
Confirmation and non‐confirmation may also be depicted as agreement and
disagreement between general trends in the data series, that is, across multiple
peaks and troughs, which represent conventional trend analysis. See Figure 9.7 for
confirmation and non‐confirmation, based on multiple peak and trough analysis.
(Non‐confirmation here may also be referred to as slope divergence, since the
slopes of the two data trends are in opposition with each other.)
Figure 9.8 illustrates confirmation and non‐confirmation using slope analysis,
since the peaks and troughs are not clearly visible on the chart. Slopes pointing in
the same general direction indicate confirmation.9.2.2 trend referencing in Divergence analysis: the prior,
Current, and subsequent trends
Non‐confirmation may potentially result in either a continuation or reversal in
price, depending on the type of divergence involved. It is useful to refer to priceFigure 9.7 Non‐Confirmation and Confirmation via Conventional Trend or Multiple
Peak and Trough Analysis Indicating Disagreement and Agreement between Price and
Oscillator.Figure 9.8 Non‐Confirmation and Confirmation via Slope Analysis Indicating Dis-
agreement and Agreement between Price and Oscillator.