Compared to regular divergences, which signal a trend reversal , hidden divergences are sign of a possible trend continuation. Thus, a hidden divergence occurs when there is an established trend. For now, let’s talk about the hidden bullish divergence.
Hidden Bullish Divergence:
1) The price and indicator are in an uptrend.
A hidden bullish divergence occurs when:
1) The price continues to make higher lows
2) the indicator makes a series of lower lows
This indicates that the uptrend will continue . This is specially useful when the price of the stock that you are holding pulls back. A higher low on the price and a lower low on the indicator tells you that you should buy the dips.
For example: MIC (Minerales Industrias Corporation)
Check this out. ANI (Agrinurture Inc. ) hourly chart. Is this a hidden bullish divergence too?