There are many different elements to a stock chart that technicians look for during review. Here are some common ones:
- Moving Averages
- Trend Lines
The element that I would like to discuss today is Divergence. To illustrate this, I bring you a basic chart of $SKX:
Now let me add a few trend lines to highlight the divergence:
As price tried to make a run at the $35 Resistance, RSI came up well short of the 70 level (overbought) that it saw when price made that price high in December 2013. This would have been a nice tell that the price strength to start the year was weak.