Indicator - CCI Divergence
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Calculation CCI Divergence
This indicator detects bullish and bearish divergences between price and the CCI.
A bullish divergence occurs when the stock price makes new lows while the indicator starts to climb upward.
A bearish divergence occurs when the stock price makes new highs while the indicator starts to go lower.
Interpretation CCI Divergence
The divergences indicate a slowdown of the current trend and a probability of a reversal.
If a bullish divergence is detected this indicator returns +1 (green histogram).
If a bearish divergence is detected, the indicator returns -1 (red histogram).
If no divergence is detected, the indicator returns 0.
Tip: If looking at a price chart, a CCI chart and a CCI Divergence chart, make sure that you have set the parameters of the CCI and CCI Divergence to the same levels.
