Positive Divergence occurs when the price of a stock or asset is making lower lows, but a technical indicator (such as RSI, MACD, or OBV) is making higher lows. This suggests that the downward momentum is weakening, and a potential reversal to the upside may occur. Example of Positive Divergence: Suppose Stock XYZ is in a downtrend: • On Day 1, the stock price is ₹200, and the RSI is 30. • On Day 5, the stock falls further to ₹190, but RSI rises to 35 instead of dropping further. Even though the price made a new low, RSI did not, indicating that selling pressure is reducing. This positive divergence suggests a possible trend reversal, meaning the stock might soon move upward. Traders use this as a buy signal when they see confirmation, such as a bullish candlestick pattern or a breakout above resistance.