Correct. Divergences (positive or negative) are not necessary precursors to bottoms & tops, however, they are indications that an impending trend change is likely. As such, divergences, just as with overbought & oversold conditions, are not buy or sell signals. I use divergences (plus other technicals) to identify likely inflection points & then look for bullish or bearish chart formations, trendlines, price support/resistance levels, bullish/bearish candlestick patterns, etc.. to signal a buy (or sell) signal when the divergences are in place.

Nice! I keep following the old trades too.

The PPO starting to turn back up & the stock just moved above this downtrend line although the breakout has been anything but impulsive so far. I’d watch to see if it starts to move higher on volume or continues down to that 0.83 support level, maybe on a backtest of the trendline as that is where I predicted REED was headed the very day it peaked back on July 31st (see chart below).