ZM example - RSI and Stochastic divergence indicate trend change

This chart provides a good example of a few things, namely how divergences are powerful indicators of a trading opportunity to come. Please note the following on the chart:
* Bearish divergence - while price made a higher low, RSI and stochastic made lower lows (yellow lines)
* divergence does not always mean a change in trend - sometimes it indicates a pullback to support is coming (be ready to take profits in these "quick" trades)
* the first move down from recent highs created divergence - 10sma was still over 20sma
* most of the time you must be patient and wait for rebound move (red oval) and now you can see the 10sma has gone below 20sma - this is the time to open a trade
* Depending on your trading style, you can place a swing trade on this daily chart, or you can use the daily chart as context for trading on a 15 or 30 min timeframe. If so, then look for trade entry, stops, and targets on the smaller timeframe.
* divergence trades are great with options because when the stock price starts moving counter to the trend there is a nice boost in option prices