Bullish Divergence
A condition in which price makes a lower low while an oscillator makes a higher low.
How it is identified
Test: current price low < previous price low, while current indicator low > previous indicator low
Unit
qualitative
In depth
The reading usually offered is that selling pressure is diminishing even as price makes a new low, which is a fair description of what the oscillator arithmetic shows. What it does not establish is that the decline is ending: divergences frequently form and dissolve repeatedly during a sustained fall, each one a failed signal to anyone acting on it alone. Practitioners therefore require confirmation from price itself before treating it as anything, which concedes that the divergence is not sufficient. This dictionary does not suggest that identifying one indicates a rise.
Worked example
Price falls to ₹468 from an earlier low of ₹480 while RSI reads 34 against an earlier 28. The condition is satisfied. It would be satisfied again at ₹452 and again at ₹440 if the decline continued.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Bullish Divergence” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.