Divergence (Technical)

A divergence occurs when a stock's price moves in one direction while a technical indicator (a mathematical tool that measures momentum or trend strength) moves in the opposite direction. You'll spot this when analyzing charts, and traders watch for it because it can signal that a price move is losing steam and might reverse soon. For example, if TechCorp stock keeps hitting higher highs but its momentum indicator is making lower highs, that's a bearish divergence—a potential warning sign. Divergences aren't foolproof predictions, but they're useful red flags that suggest the current trend may be weakening and a change could be coming.