Divergence
In the case of MA trend analysis, divergence is not the opposite of convergence. Chapter 12 examines convergence and divergence relating to momentum; divergence when analyzing MA is defined as opposite price movement compared to what MA forecasts.
Key Point
Convergence of the two MA lines anticipates crossover and possible reversal.
A price crossover (movement of price above or below both MA lines) is considered a strong signal. For example, in Figure 11.4, a move in price below both MA lines implies a bearish price move. However, as soon as this occurs, price begins moving in a bullish trend direction.
Figure 11.4 Divergence ...
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