What does stock divergence mean?

What does bottom divergence mean in the stock market?

Bottom divergence means that the stock index and the indicator or trading volume are not at the same top. That is to say, if the stock index hits a new low, but the indicator or trading volume does not hit a new low or the indicator moves in parallel, it becomes the bottom divergence of the stock index. . On the contrary, it becomes the bottom deviation of the indicator. In this case it can be a short-term buying point.

What are the meanings of top and bottom and divergence in the stock market? Thank you. Please be as detailed as possible

What is top and divergence? What is bottom divergence?

Top divergence

When the stock price trend on the K-line chart is higher than the previous peak, the stock price has been rising, while the trend of the graph composed of red columns on the MACD indicator graph is One peak is lower than the other, that is, when the high point of the stock price is higher than the previous high point, and the high point of the MACD indicator is lower than the previous high point of the indicator, this is called top divergence.

The phenomenon of top divergence is generally a signal that the stock price is about to reverse trend at a high level, indicating that the stock price is about to fall in the short term, which is a signal to sell the stock.

Bottom divergence

Bottom divergence generally appears in the low area of ??stock prices. When the stock price on the K-line chart is trending, the stock price is still falling, and the trend of the graph composed of green columns on the MACD indicator graph is one bottom higher than the other, that is, when the low point of the stock price is lower than the previous low point, However, the low point of the indicator is higher than the previous low point. This is called bottom divergence.

The phenomenon of bottom divergence is generally a signal that the stock price may reverse upward at a low level, indicating that the stock price may rebound upward in the short term, which is a signal to buy stocks in the short term

When using divergence Things that should be noted:

1. Divergence only represents possibility. There is no 100% probability in terms of probability. It can be understood that the most likely occurrence is 70%.

The probability of a market rise after a bottom divergence is 70%

The probability of a market decline after a top divergence is 95%

The picture is a MACD indicator bottom divergence< /p>

What does stock divergence mean?

Theoretically speaking, the top and bottom divergence between MACD and stock price (index) cannot last long, and the market will reverse sooner or later. However, after the top divergence between MACD and the stock price (index), there will be a top divergence. You don’t know when it will take effect to cause the stock price (index) to peak and fall. In the same way, after the bottom divergence between MACD and the stock price (index), there will be a bottom divergence. , you don’t know when it will take effect and cause the stock price (index) to bottom out and rise. Therefore, if you rush to go short as soon as you see their top divergence, or if you rush to go long as soon as you see their bottom divergence, you will pay a price, especially when you see their bottom divergence, it is more risky to buy the bottom.

It can be done like this: when you see their top divergence, you should be ready to go short (don’t rush to sell, and exit when you find that the situation is not good, but you should not buy again); when you see their bottom divergence When you do, you should be prepared to go long (don't rush to buy, buy when you find the trend is getting stronger, of course you shouldn't sell again at this time). However, it should be noted that if you encounter the following situations, you should make an immediate decision and take action when it is time to take action. This means that there is a top divergence between i and the stock price (index), and the stock price has increased close to or exceeded 100%. At the same time, DIF and NL gas CD form multiple death crosses, and you should sell immediately at this time. (2) There is a bottom divergence between the NL gas CD and the stock price (index), and the stock price has fallen close to 50% or more than 50%. At this time, you can start building positions in batches.

If the stock price (referring to the K-line) is rising, the high points are higher than the other, and the moving averages are arranged upward in waves, but the indicators (either MACD or KDJ) are downward, That is, it goes down in waves, and the high points are lower than the last. This means that the stock price deviates from the indicator, which is called "top divergence"; if the stock price (referring to the K line) is falling, and the low points are lower than the last, the moving average It is also arranged in waves downward, but the indicator (MACD or KDJ can be used) is upward, that is, it goes up in waves, and the high points are higher than the last. This means that the stock price deviates from the indicator, which is called " bottom deviation”. "Top divergence" indicates that the rising market will end, and "bottom divergence" indicates that the falling market will end.

What does stock indicator divergence mean?

In almost all technical indicators, there is a divergence function, which indicates that the market trend is about to peak or bottom, among which MACD , RSI and CCI all have this prompt function. Usually there are two types of indicator divergence, one is top divergence and the other is bottom divergence.

1. Top divergence: Top divergence means that the upward trend has slowed down, and it is difficult for the index or stock price to stabilize at a high level, and may even turn around and fall back; if this happens, investors should sell as soon as possible.

2. Bottom divergence: Bottom divergence means that the decline is about to end and the index or stock price begins to bottom out and rise. This is a buying signal.

Research and Judgment of Divergence

To determine whether an individual stock has a divergence, it is difficult to determine by simply observing changes in stock price trends. Investors are best to use technical indicators (such as RSI, KDJ, etc.), trading volume, open positions, etc. to assist in analysis.

Take RSI (relative strength index) as an example. If the stock price reaches a new high, the price is higher than the previous high, but the RSI is lower than the previous high, or even turns around and drops to 50, which is a good score. below the boundary. This is evidence of top divergence.

Similarly, taking RSI as an example, if the stock price is lower than the previous low, its RSI line does not follow, but is higher than the previous low, or even turns around and rebounds. This is a kind of evidence of the bottom deviation.

The emergence of divergence can be seen in hourly charts, daily charts, weekly charts, etc. Due to the extremely high volatility of hourly charts, fifteen-minute charts, five-minute charts, etc., trend traps are prone to occur; on the contrary , the divergence changes on the daily chart and weekly chart are more credible. In addition, the greater the number of divergences, the higher the probability of peaking or bottoming. Generally speaking, if the number of divergences reaches three or more, the chance of peaking or bottoming is quite high.

For details, you can refer to the relevant books to learn about it systematically, and at the same time practice with a simulated market. In this way, you can quickly and effectively master the theory and practice. The current Niugubao simulated stock trading is good , many functions in it are enough to analyze the market and individual stocks, and they are helpful to some extent. I hope it can help you, and I wish you a happy investment!

What is bottom divergence in stocks?

When the stock price index goes down wave by wave, and DIF and MACD do not fall simultaneously, but rise wave by wave, forming a bottom deviation from the stock price trend, it indicates that the stock price is about to rise. If DIF crosses MACD from bottom to top twice at this time, forming two golden crosses, the stock price is about to rise significantly.

What does volume-energy divergence mean in the stock market?

There are two situations of volume-price divergence. One is shrinking volume and rising, which means that the dealer has enough chips in his hands to move the stock price without too much money. Pull up, if this happens, be careful of the dealer shipping at a high level. The shipping situation is to put a huge amount at a high level, 2; a large amount at a low level means that there are bookmakers actively absorbing chips at a low level. If this happens, follow up boldly. A more specific written explanation is: Volume-price divergence: The current volume-price relationship has changed from the previous volume-price relationship. Generally, the volume-price divergence will create a new trend, or it may just be an adjustment in the upward trend or a rebound in the downward trend. . Price-volume divergence usually refers to when the trading volume of a stock or index decreases when it rises, or when the trading volume increases when it falls, it is called the price-volume divergence. An increase in price and a decrease in volume is called volume-price divergence, and is considered a sign of a decline. When prices fall and volume decreases, it is called volume-price divergence, but it is not a sign of a rise. The reason is that volume is required to rise, but not volume to fall. When the stock price reaches the head range, there will often be a lot of divergence and confusion in the coordination between volume and price! Judging from actual experience, the positive line with a real rising nature will rarely deviate from the coordination between volume and price during the day. On the other hand, the volume and price of Yang lines that have not risen well often show deviations. Generally speaking, the higher the stock price rises, the greater the trading volume, and there will be more divergence between volume and price. When the stock price first rose, the trading volume was relatively small, but the volume and price were perfectly coordinated. Follow-up question: At what point is the volume considered high? Hey, I'm a newbie and I don't quite understand, please explain to me again, thank you. Answer: The rectangular bar under the daily K-line is the amount of energy. Short means that the amount is small, and long and high means that the amount is large. The situation of each stock is different, so the height of volume increase and decrease is also different. Generally speaking, volume increases and decreases are relative to the average height over a period of time. There are no fixed standards. If you pay more attention and read more, you will be able to fully understand and master it within a week or two.

What does the daily bottom line divergence mean?

Bottom divergence means that the stock index and the indicator or trading volume are not synchronized. That is to say, if the stock index hits a new low, but the indicator or trading volume does not hit a new low or the indicator moves in parallel, it becomes the bottom divergence of the stock index. . On the contrary, it becomes the bottom deviation of the indicator. There are two types of indicator divergence, one is top divergence and the other is bottom divergence.

Top divergence is when the stock trend on the stock price K-line chart is higher than the previous peak, and the stock price has been rising, while the trend of the graph composed of red columns on the macd indicator graph is lower than the previous peak, that is, When the high point of the stock price is higher than the previous high point and the high point of the macd indicator is lower than the previous high point of the indicator, this is called top divergence. The phenomenon of top divergence is generally a signal that the stock price is about to reverse trend at a high level, indicating that the stock price is about to fall in the short term, which is a signal to sell the stock.

Bottom divergence bottom divergence generally appears in the low area of ??stock prices. When the stock price trend on the K-line chart, the stock price is still falling, and the trend of the graph composed of green columns on the macd indicator graph is higher than the previous bottom, that is, when the low point of the stock price is lower than the previous low point, However, the low point of the indicator is higher than the previous low point. This is called bottom divergence. The phenomenon of bottom divergence is generally a signal that the stock price may reverse upward at a low level, indicating that the stock price may rebound upward in the short term, and is a signal to buy stocks in the short term.

In practice, the divergence of the macd indicator generally appears in a strong market and is more reliable. When the stock price is at a high price, usually only one divergence appears to confirm that the stock price is about to reverse, and when the stock price is at a low price , it usually takes several repeated divergences before it can be confirmed. Therefore, the accuracy of the research and judgment of the top divergence of the macd indicator is higher than that of the bottom divergence, which investors should pay attention to.

For detailed application of technical indicators, you can use Niugubao mobile market software to see. Each indicator in it has detailed instructions on how to use it, how to operate it in what form, and how to use it. It’s a lot more convenient, I hope I can help you, and I wish you a happy investment!

What does it mean to divergence from Jinchai in stocks?

Divergence, also known as divergence, means that when a stock or index continues to hit new lows (highs) while falling or rising, some Technical indicators that do not follow new lows (highs) are called divergences.

During the divergence process, the upward or downward trend will slow down and the trend of the stock price will be reversed. The so-called bottom divergence means that the stock price or index is in a relative position. The reverse is true for top divergence.

1. Top divergence: Top divergence means that the upward trend has slowed down, and the index or stock price is difficult to stabilize at a high level, and may even turn around and fall back; if this is seen, investors should sell goods as soon as possible.

2. Bottom divergence: Bottom divergence means that the decline is about to end, and the index or stock price begins to bottom out and rise. This is a buying signal.

Golden crosses and dead crosses are found in many technical indicators. There are moving average golden crosses and dead crosses. For example, when the 5-day moving average crosses the 10-day or 20-day moving average upward, it is called a golden cross, and when it crosses downward, it is called a golden cross. The 10-day or 20-day moving average is called a dead cross; in the KDJ indicator, when the K line crosses the D line, it is a golden cross, and vice versa; in the MACD, the M line crosses the D line, which is a golden cross. On the contrary, it is a death cross and so on.

Under normal circumstances, it can be understood that the golden cross is a buying signal, and the dead cross is a selling signal. You can usually conduct buying and selling transactions based on it.

1. The signal sent by technical indicators is just a signal. It just tells us what the dealer wants to tell us through the market. Whether what the dealer said is the truth or a lie is impossible for us to know at the time. We can only know it through Future proofed.

If the dealer tells lies and the market develops in the opposite direction, the only thing we can do is to quickly adjust the original operation plan to minimize the loss. For more details, you can look at the Japanese candle chart system to learn it. At the same time, combined with the assistance of a simulation software, this can speed up the learning progress and effectively master the knowledge. When I first started, I also learned this way using the Niugubao simulation version. There are multiple indicators to guide, and each indicator has detailed instructions on how to use it. It is much easier to use. Happy investing!

How can we see stock divergence?

Take a look at the picture for yourself. The explanation is very clear. Beili generally only has volume-price divergence and macd divergence. The specific response plan is on the map.

How to understand the deviation between stock price and indicators?

To put it simply, the Sichuan indicator points in the opposite direction to the short-term stock price trend. This situation is more complicated. It may be the stock price determined by the market maker, or it may be the indicator determined by the market maker. Anyway, attention should be paid to this situation. , the stock price will change.