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follows: rising peaks in the supporting data series indicate increasing momen-

tum, which reflects underlying strength in price, and therefore are potentially

bullish for price. See Figure 9.33. The divergent setup itself includes both the

non‐confirmation as well as the anticipated long entry signal.

Figure 9.34 shows a bull setup between points A and B on FXI (iShares

FTSE China 25 Index Fund, NYSE). We see price continuing its downtrend, as

expected after a reverse divergent setup. A reversal is anticipated in a bull set-

up and channel projection analysis identified a potential bottom in the index

Figure 9.33 Reverse Divergence Seen in the Early Stages of a Bull Setup.

Figure 9.34 A Bull Setup on FXI.
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