Hand gestures, such as hand or finger hovering, in the proximity space of a sensing panel are detected from X-node and Y-node sensing signals indicative of the presence of a hand feature at corresponding row and column locations of a sensing panel. Hovering is detected by detecting the locations of maxima for a plurality of frames over a time window for sets of X-node and Y-node sensing signals by recognizing a hovering gesture if the locations of the maxima detected vary over the plurality of frames for one of the sets of sensing signals and not for the other of set. Finger shapes are distinguished over “ghosts” generated by palm or fist features by transforming the node-intensity representation for the sensing signals into a node-distance representation based on distances of detection intensities for a number of nodes under a peak for a mean point between valleys adjacent to the peak.