The Handbook of Technical Analysis + Test Bank_ The Practitioner\'s Comprehensive Guide to Technical Analysis ( PDFDrive )

Divergence Analysis

In Figures 9.52 to 9.55, we now instead observe standard divergence leading

to a continuation of the current prior trend, whereas reverse divergence is being

followed by a reversal of the prior larger trend. Therefore, we must be extremely

careful when employing terms like continuation and reversal in divergence analy-

sis without first specifying which wave degree or trend is being observed.

Figure 9.52 Standard Bearish Divergence Leading to Reversal of the Current and Con-

tinuation of the Prior Larger Trend.

Figure 9.53 Standard Bullish Divergence Leading to Reversal of the Current and Con-

tinuation of the Prior Larger Trend.