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 price charts, and traders watch for it because it can signal that a current trend is weakening and might reverse soon. For example, if TechCorp stock keeps hitting higher highs but its momentum indicator keeps hitting lower highs, that's a bearish divergence—a potential warning sign. It's not a guaranteed prediction, but it's a red flag worth investigating before making a trade.