This code snippet demonstrates how to identify bullish and bearish divergences using the Relative Strength Index (RSI) modified by Bollinger Bands in the ProBuilder programming language. Divergences occur when the price of an asset moves in the opposite direction of a technical indicator and can be a signal of potential price reversals.

ZMYR = RSI[21](close)
ZSR = RSI[2](ZMYR)-50
M=wilderAVERAGE[18](ZSR)
SD=STD[18](ZSR)
UB=M+1.2*SD
LB=M-1.2*SD

//bullish divergences
//trough
trough=zsr>zsr[1] and zsr[1]lb then
  //trough
  if trough then
    if low[1]oscLL and oscbar>0 then
      drawarrowup(barindex[1],zsr[1]) coloured(69,139,116)
      drawsegment(oscbar,oscll,barindex[1],zsr[1]) coloured(69,139,116)
      oscbar=0
      oscll=1000
    endif
  endif
endif

//bearish divergences
//peak
peak=zsrzsr[2]

//reset on new cross
if zsr crosses over UB then
  oscbarr=0
  oschh=0
endif

//oscillator above
if zsr[1]>UB then
  if peak and zsr[1]>=oschh then
    oschh=zsr[1]
    oscbarr=barindex[1]
  endif
endif

//osc below ub
if zsrhigh[barindex-oscbarr] and zsr[1]0 then
      drawarrowdown(barindex[1],zsr[1]) coloured(255,0,0)
      drawsegment(oscbarr,oschh,barindex[1],zsr[1]) coloured(255,0,0)
      oscbarr=0
      oschh=0
    endif
  endif
endif

Return zsr style(line,3) as "MOMENTUM", ub coloured(190,190,190) style(dottedline,2) as "OverBought" , lb coloured(190,190,190) style(dottedline,2) as "OverSold"

The code is structured to calculate and visualize divergences in trading data:

• RSI Calculation: Two levels of RSI are calculated. ZMYR is the RSI over 21 periods of the closing prices, and ZSR is a modified RSI over 2 periods subtracted by 50.
• Bollinger Bands: The mean (M) and standard deviation (SD) of ZSR are calculated to determine the upper (UB) and lower (LB) bands.
• Divergence Detection: The script checks for bullish and bearish divergences by comparing the current and past values of ZSR and the asset’s price lows or highs. Visual indicators (arrows and segments) are drawn when divergences are detected.
• Reset Conditions: Variables are reset when ZSR crosses the Bollinger Bands, preparing the script for the next potential divergence.

This approach helps in spotting potential reversal points in the price of an asset based on technical divergences.