Student’s Question:
Does it matter in which direction there's a divergence. Hypothetically, if the RSI makes a new high but the price doesn't (the opposite to what's above), can we consider it a divergence too and use to make a trade?
Power Course Instructor’s Response:
Good question...and, yes, it does exist in either direction.
Negative divergence is when the market makes a higher high but the indicator does not. In this instance, one should look for possible selling pressure.
Positive divergence is when the market makes a lower low but the indicator does not. In this instance, one should look for possible buying interest.
