Hidden Bullish Divergence (RSI-Based) – Description
Hidden bullish divergence using the Relative Strength Index (RSI) is a technical signal that suggests the continuation of an existing uptrend. It occurs when the price makes a higher low, but the RSI makes a lower low. This pattern reveals that, despite a short-term pullback in price, the buying pressure (bullish momentum) is still strong beneath the surface.
Key Characteristics:
Price: Forms a higher low, indicating support and strength in the trend.
RSI: Forms a lower low, showing temporary weakness or an oversold condition.
Signal Type: Continuation (not reversal) – it suggests the uptrend is likely to resume.
Why It Matters:
RSI typically measures momentum. When RSI dips lower while price stays relatively strong, it shows that the market shook out weak hands but kept its bullish structure. This is a sign that buyers are still in control, and the pullback may offer a buying opportunity.
How to Use It:
Look for this setup during a pullback in an uptrend.
Confirm with trendlines, support zones, or volume.
Consider entering long trades when RSI starts to turn up from its low, confirming momentum is returning.
Summary:
Hidden bullish divergence (RSI):
Price: Higher low
RSI: Lower low
Implication: Trend likely to continue upward
Hidden bullish divergence using the Relative Strength Index (RSI) is a technical signal that suggests the continuation of an existing uptrend. It occurs when the price makes a higher low, but the RSI makes a lower low. This pattern reveals that, despite a short-term pullback in price, the buying pressure (bullish momentum) is still strong beneath the surface.
Key Characteristics:
Price: Forms a higher low, indicating support and strength in the trend.
RSI: Forms a lower low, showing temporary weakness or an oversold condition.
Signal Type: Continuation (not reversal) – it suggests the uptrend is likely to resume.
Why It Matters:
RSI typically measures momentum. When RSI dips lower while price stays relatively strong, it shows that the market shook out weak hands but kept its bullish structure. This is a sign that buyers are still in control, and the pullback may offer a buying opportunity.
How to Use It:
Look for this setup during a pullback in an uptrend.
Confirm with trendlines, support zones, or volume.
Consider entering long trades when RSI starts to turn up from its low, confirming momentum is returning.
Summary:
Hidden bullish divergence (RSI):
Price: Higher low
RSI: Lower low
Implication: Trend likely to continue upward
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.