Divergence
Also called: bullish divergence, bearish divergence
When price and a momentum indicator disagree — price makes a new high but the indicator doesn't — warning the move is losing steam.
Divergence compares the slope of price to the slope of an oscillator like RSI or MACD. Bearish divergence: price prints a higher high while the indicator makes a lower high, hinting momentum is fading beneath a rising price. Bullish divergence: price makes a lower low but the indicator makes a higher low, hinting selling is exhausting.
Divergence is a warning, not a trigger — momentum can diverge for a long time before price turns. It's strongest at extremes and when confirmed by a break of structure.
On StockSetups
StockSetups computes RSI and MACD divergence automatically and exposes both as screener fields, so you can flag names where momentum is quietly diverging from price.
Frequently asked
What is the difference between bullish and bearish divergence?
Bullish divergence is price making a lower low while the indicator makes a higher low (selling exhausting); bearish divergence is price making a higher high while the indicator makes a lower high (buying fading). Both warn of a possible turn.
Related terms
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