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Divergence with no effect?
LGIH has been making higher highs since Aug 19th, but showing lower highs on both the MACD and RSI...classic bearish divergence. But to no effect...until yesterday. It made 4 new highs and 4 lower peaks on MACD & RSI. This leaves me with 2 questions:
1) Is yesterday's 10% drop just long overdue?
2) If so...what took it so long?
I'm new to this, but reading Elder's "Trading for a Living", the Bullish/bearish divergence is supposed to be one of the strongest indicators in technical analysis.
Has anyone else run across a divergence that just wouldn't take hold?