Final answer:
A bullish divergence wherein a stock's price makes lower lows and MACD makes higher lows often indicates a potential reversal in momentum, signaling that the stock might experience an uptrend soon.
Step-by-step explanation:
When a stock makes a lower low but the MACD makes a higher low, this is often interpreted as a bullish divergence. A bullish divergence occurs when the price of an asset is declining (creating lower lows), but a technical indicator like the MACD starts to show strength by making higher lows.
This divergence can signal that the downward momentum in the stock price is waning and that a potential reversal to the upside might occur. It suggests that the selling pressure is losing strength and that the stock may be ready for a possible rally or upturn.
However, traders and investors should use additional indicators and analysis to confirm this potential trend reversal to safeguard against false signals.