Technical outlook – Using the many tools among the technical stock analysts, ‘Divergence’ is probably one of my favourite trading signals because they are dynamic and most often offer a reliable, high-quality trading signal reversal when combined with other trading tools and concepts.
In Technical Analysis, divergence can be a significant warning signal that a bullish or bearish trend is coming near to an end.
Divergence appears when a technical indicator begins to establish a trend that disagrees with the actual price movement.
These “disagreements” are strong signals and somewhat useful for the trader/investor.
Bullish divergence occurs when the price of an asset makes a new low while the indicator starts to climb.
The bullish divergence is viewed from the 3-day lookback Relative Strength Index (RSI).
It is assessed once prices break above $2.05 level for Yancoal Australia Limited (YAL), should in terms generate a move $2.15 with scope to $2.35-40.
Company Overview – Yancoal Australia Limited (YAL) is a coal miner.
Operating five mines and managing five others across New South Wales, Queensland and Western Australia, Yancoal currently employs approximately 3,000 people, sourcing the majority of them from the local communities in which they operate.