Breadth thrusts and divergences

Rapid broad participation — and its failures.

Breadth thrusts and divergences

| Concept | Explanation | |---|---| | Breadth thrust | Rapid, unusually broad improvement in participation. | | Bullish breadth divergence | Participation improves before the index confirms. | | Bearish breadth divergence | Participation weakens while the index remains strong. | | Confirmation | Index and breadth move in the same direction. | | Failure | A breadth improvement fades without price follow-through. |

Module knowledge check

1. How does an advance-decline line differ from an index?
2. What does increasing new lows reveal?
3. Why compare capitalization-weighted and equal-weighted indices?
4. Why can narrow leadership persist?

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