Divergence

Divergence occurs when two related measures, signals, or trends move in different directions over time. In finance, for example, it often refers to when the price of an asset and an indicator (like RSI or MACD) no longer align—while the price rises, the indicator might fall, signaling a potential reversal. In broader terms, divergence highlights a disconnect between expected or usual relationships, suggesting that change or an important shift might be happening. Recognizing divergence helps analysts anticipate possible upcoming turns or shifts in trends before they fully materialize.