Divergence

In the context of investments, divergence occurs when two data points move in opposite directions when charting technical analysis. For example, the price of an asset may rise while its relative strength index (RSI) drops. Convergence, on the other hand, refers to two technical indicators moving in the same direction. Divergence can also refer to the price of a futures contract drifting away from the spot price of the underlying commodity as the contract’s delivery date approaches, potentially leading to liquidation.