Positive Divergence is a TA term derived from the MACD formula. MACD measures the difference between two Exponential Moving Averages
MACD generates bullish signals from three main sources:
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Positive Divergence
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Bullish Moving Average Crossover
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Bullish Centerline Crossover
A Positive Divergence occurs when MACD begins to advance and the security is still in a downtrend and makes a lower reaction low. MACD can either form as a series of higher Lows or a second Low that is higher than the previous Low. Positive Divergences are probably the least common of the three signals, but are usually the most reliable, and lead to the biggest moves.
I could not paste in the chart used as an example - so here is the link: http://stockcharts.com/school/doku.p...
I see the similarity between the gold charts used in the article and the example used in the link above, but I do not see the correlation when I searched some of the individual ROF players charts.
Perhaps once positive diversion is confirmed in the overall commodity sector - we will follow in the trend.
It is a positive signal for certain - but I don't think we are quite there yet.
