Anatomy of a divergence JC Penny [JCP] 02/08/2010

JC Penny [JCP] in the first figure below displays a classic divergence on the daily chart on 02/08/2010. Note the nice inverted 'V' shape formed between the low on 1/28/2010 and th lower low on 02/05/2010. The MACD is clearly diverging to the upside. In the lower time frames in the second figure below, JC Penny 60 minute price bars through 02/08/2010 show MACD and price are turning up.

 

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