Hidden Bullish/Bearish Divergence Detection

Install and import#

bash

npm install fintech-algorithms

import { hiddenBullishBearishDivergenceDetection } from "fintech-algorithms/geometric-chart-patterns/indicator-divergence-detection/hidden-bullish-bearish-divergence-detection";

Signature#

hiddenBullishBearishDivergenceDetection(payload)

Detects hidden bullish and bearish divergence from causally aligned consecutive pivot pairs.

Parameters#

Name	Type	Notes
`payload`	{ topic_id: string; data_class: string; as_of: string; bars: { timestamp: string; open: number; high: number; low: number; close: number; finalized: boolean }[]; price_pivots: { kind: string; event_index: number; confirmation_index: number; price: number; prominence: number }[]; indicators: { name: string; family: string; polarity: number; scale: number; pivots: { kind: string; event_index: number; confirmation_index: number; value: number; prominence: number }[] }[]; parameters: { max_lag: number; min_separation: number; max_separation: number; min_price_fraction: number; min_indicator_delta: number; confirmation_horizon: number; invalidation_buffer: number; minimum_indicators: number }; weights: { RSI: number; MACD-Histogram: number; Stochastic-K: number }; as_of_index: number; universe: { symbol: string; state: string; divergence_type: string; confluence_score: number; freshness: number; liquidity: number; data_quality: number; available_index: number; eligible: boolean }[] }	Topic payload containing price pivots, indicators, and separation, alignment, price, and indicator thresholds.

Returns#

{ topic_id, state, events, event_count }

One detection record with state equal to detected or not-detected and hidden-divergence event diagnostics.

Errors#

When pivot, indicator, lag, separation, or divergence-threshold input is invalid — throws

Complexity: time , space .

Worked example#

executed Captured by running this function on the input its own test provides. Real output of real code — but not asserted against a published figure.

Input#

payload

{
  "topic_id": "D08-F05-A03",
  "data_class": "synthetic-teaching",
  "as_of": "2026-01-08T13:30:00Z",
  "bars": [
    {
      "timestamp": "2026-01-05T14:30:00Z",
      "open": 105.75,
      "high": 107,
      "low": 105,
      "close": 106,
      "finalized": true
    },
    {
      "timestamp": "2026-01-05T15:30:00Z",
      "open": 106.112,
      "high": 107.362,
      "low": 105.362,
      "close": 106.362,
      "finalized": true
    },
    {
      "timestamp": "2026-01-05T16:30:00Z",
      "open": 106.4614,
      "high": 107.7114,
      "low": 105.7114,
      "close": 106.7114,
      "finalized": true
    }
  ],
  "price_pivots": [
    {
      "kind": "low",
      "event_index": 18,
      "confirmation_index": 21,
      "price": 98,
      "prominence": 0.72
    },
    {
      "kind": "low",
      "event_index": 42,
      "confirmation_index": 45,
      "price": 102,
      "prominence": 0.84
    }
  ],
  "indicators": [
    {
      "name": "RSI",
      "family": "bounded-momentum",
      "polarity": 1,
      "scale": 100,
      "pivots": [
        {
          "kind": "low",
          "event_index": 19,
          "confirmation_index": 22,
          "value": 36,
          "prominence": 0.76
        },
        {
          "kind": "low",
          "event_index": 41,
          "confirmation_index": 44,
          "value": 28,
          "prominence": 0.86
        }
      ]
    },
    {
      "name": "MACD-Histogram",
      "family": "moving-average-momentum",
      "polarity": 1,
      "scale": 5,
      "pivots": [
        {
          "kind": "low",
          "event_index": 18,
          "confirmation_index": 21,
          "value": -1,
          "prominence": 0.7
        },
        {
          "kind": "low",
          "event_index": 42,
          "confirmation_index": 45,
          "value": -2.2,
          "prominence": 0.81
        }
      ]
    },
    {
      "name": "Stochastic-K",
      "family": "range-momentum",
      "polarity": 1,
      "scale": 100,
      "pivots": [
        {
          "kind": "low",
          "event_index": 17,
          "confirmation_index": 20,
          "value": 31,
          "prominence": 0.68
        },
        {
          "kind": "low",
          "event_index": 43,
          "confirmation_index": 46,
          "value": 19,
          "prominence": 0.78
        }
      ]
    }
  ],
  "parameters": {
    "max_lag": 3,
    "min_separation": 5,
    "max_separation": 40,
    "min_price_fraction": 0.005,
    "min_indicator_delta": 0.05,
    "confirmation_horizon": 12,
    "invalidation_buffer": 0.005,
    "minimum_indicators": 2
  },
  "weights": {
    "RSI": 0.4,
    "MACD-Histogram": 0.35,
    "Stochastic-K": 0.25
  },
  "as_of_index": 71,
  "universe": [
    {
      "symbol": "SYNTH-A",
      "state": "confirmed",
      "divergence_type": "regular-bullish",
      "confluence_score": 86,
      "freshness": 92,
      "liquidity": 80,
      "data_quality": 98,
      "available_index": 47,
      "eligible": true
    },
    {
      "symbol": "SYNTH-B",
      "state": "candidate",
      "divergence_type": "regular-bearish",
      "confluence_score": 91,
      "freshness": 98,
      "liquidity": 72,
      "data_quality": 94,
      "available_index": 54,
      "eligible": true
    },
    {
      "symbol": "SYNTH-C",
      "state": "confirmed",
      "divergence_type": "hidden-bullish",
      "confluence_score": 74,
      "freshness": 70,
      "liquidity": 96,
      "data_quality": 90,
      "available_index": 39,
      "eligible": true
    }
  ]
}

Call#

hiddenBullishBearishDivergenceDetection(payload)

Returns#

object with 4 fields: topic_id, state, events, event_count

{
  "topic_id": "D08-F05-A03",
  "state": "detected",
  "events": [
    {
      "type": "hidden-bullish",
      "direction": "bullish",
      "kind": "low",
      "indicator": "MACD-Histogram",
      "indicator_family": "moving-average-momentum",
      "price_pair": [18, 42],
      "indicator_pair": [18, 42],
      "price_values": [98, 102],
      "indicator_values": [-0.2, -0.44000000000000006],
      "price_delta_fraction": 0.04081632653061224,
      "indicator_delta": -0.24000000000000005,
      "separation": 24,
      "max_alignment_lag": 0,
      "prominence": 0.7675
    },
    {
      "type": "hidden-bullish",
      "direction": "bullish",
      "kind": "low",
      "indicator": "RSI",
      "indicator_family": "bounded-momentum",
      "price_pair": [18, 42],
      "indicator_pair": [19, 41],
      "price_values": [98, 102],
      "indicator_values": [0.36, 0.28],
      "price_delta_fraction": 0.04081632653061224,
      "indicator_delta": -0.07999999999999996,
      "separation": 24,
      "max_alignment_lag": 1,
      "prominence": 0.795
    },
    {
      "type": "hidden-bullish",
      "direction": "bullish",
      "kind": "low",
      "indicator": "Stochastic-K",
      "indicator_family": "range-momentum",
      "price_pair": [18, 42],
      "indicator_pair": [17, 43],
      "price_values": [98, 102],
      "indicator_values": [0.31, 0.19],
      "price_delta_fraction": 0.04081632653061224,
      "indicator_delta": -0.12,
      "separation": 24,
      "max_alignment_lag": 1,
      "prominence": 0.7550000000000001
    }
  ],
  "event_count": 3
}

Other exports#

This module also exports adaptIndicator, alignPivots, detectDivergences, scoreDivergence, advanceState, combineConfluence, rankUniverse, runTopic, priceIndicatorPivotAlignment, regularBullishBearishDivergenceDetection, multiIndicatorDivergenceAdapters, divergenceStrengthAndQualityScoring, divergenceConfirmationAndInvalidationStateMachine, multiIndicatorDivergenceConfluence, marketWideDivergenceScannerAndRanking. Every module additionally exports run as an alias of its primary function, and a meta object carrying its catalog id, domain, family, shape and article URL.

Diagrams#

Calculation flow#

Hidden Bullish/Bearish Divergence Detection calculation flow

flowchart LR
    A["Aligned same-kind pivot pair"] --> P{"Price preserves structure?"}
    P -->|Higher low| I{"Indicator makes lower low?"}
    I -->|Yes, thresholds pass| B["Hidden bullish"]
    P -->|Lower high| J{"Indicator makes higher high?"}
    J -->|Yes, thresholds pass| S["Hidden bearish"]
    I -->|No| N["No hidden event"]
    J -->|No| N
    B --> C["Continuation-context geometry only"]
    S --> C

How it works#

This page states the contract — how to call it correctly. The article explains the concept: why it works, and where it breaks.

Read the article →

References#

TradingView — RSI divergence indicator — TradingView
TradingView — MACD indicator — TradingView
TradingView Pine Script — Repainting — TradingView Pine Script
TradingView Pine Script — Visuals FAQ — TradingView Pine Script
Fidelity — Relative Strength Index — Fidelity
Fidelity — MACD — Fidelity
TA-Lib — Function index — TA-Lib
TA-Lib — RSI — TA-Lib
SciPy — find_peaks — SciPy
Bailey et al. — Effects of Backtest Overfitting — Bailey et al.
Historical-example decision
Topic-specific applicability map

Hidden Bullish/Bearish Divergence Detection

Install and import#

Signature#

Parameters#

Returns#

Errors#

Worked example#

Input#

Call#

Returns#

Other exports#

Diagrams#

Calculation flow#

How it works#

References#

The rest of the Indicator Divergence Detection family#