MACD Hidden divergence is used as a possible sign for a trend continuation. This setup occurs when price retraces to retest a previous high or low.
- Hidden Bullish Divergence
- Hidden Bearish Divergence
Hidden Bullish Divergence
- Forms when price is making a higher low (HL), but the MACD oscillator is showing a lower low (LL).
- Hidden bullish divergence occurs when there is a retracement in an uptrend.
MACD bullish divergence
- This divergence confirms that a retracement move is complete. This divergence indicates underlying strength of an uptrend.
Hidden Bearish Divergence
- Forms when price is making a lower high (LH), but the MACD oscillator is showing a higher high (HH).
- Hidden bearish divergence occurs when there is a retracement in an uptrend.
MACD bearish divergence
- This setup confirms that a retracement move is complete. This diverging indicates underlying strength of a downtrend.
