If you’ve ever wondered why we chart momentum and volume along with price, BMY tells us why.
Today shares literally collapsed back to the lows, down from the prior swing highs.
Wouldn’t it have been nice to know this was a distinct possibility?
Divergences warned us many days in advance.
Let’s study this example from this reversal and learn to spot it in the future – and be ready.
We’re seeing Bristol Myers Squibb (BMY) reverse UP away from the $50.00 level in October to peak at $60.00 as we began 2017.
Look closely at the swing highs in November, December, and January.
If you understand divergences, you’ll know that something is very wrong that price isn’t showing.
With price at new swing highs, comfortably above the 20 day EMA, things are severely deteriorating beneath the (price) surface.
Namely volume has been weakening since November along with momentum (both are trending lower).
The chart above shows us the collapse back to $50.00 but let’s zoom-in on the divergences for clarity: Continue Reading…