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Setups – Bearish RSI Divergence

Overview​

The Setups – Bearish RSI Divergence profile highlights high-conviction short setups where recent price action diverges from momentum — signaling potential reversals. Only confirmed bearish RSI divergence signals from the last two sessions are included. Combined with structural filters and AI scoring, this profile helps identify clean short entries supported by volume, volatility, and group context.

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This profile is updated in real time and applies filters automatically to show only short setups with confirmed RSI divergence, low resistance to target, and proper trade structure. It can be used across all market sessions.

Strategy Focus​

  • Surface short setups with confirmed bearish RSI divergence over the past 1–2 days
  • Focus on candidates with low resistance between current price and the downside target
  • Filter by tradability, volatility, and momentum to increase reliability
  • Use multi-factor AI signals to enhance directional confidence
  • Scan across all sessions to catch breakdowns or fading strength in real time
  • Build visual workflows using Multi-Charts and add setups to watchlists

Filters Applied​

This profile applies multiple layers of filters to ensure setups meet structural, momentum, and divergence criteria:

  • Liquidity Rating > 70, ATRP 14D ≥ 0.5, Volatility (Month) ≥ 1: Ensures the stock is tradable and volatile enough for short setups to follow through efficiently.
  • AI - Alpha Strategy = Short: Filters for tickers with AI-confirmed short bias based on structure and behavior.
  • AI - Risk/Reward ≥ 2, AI - Path to Target ≤ 1: Includes only setups with strong downside reward relative to risk and minimal barriers to the projected target.
  • Bear RSI Divergence Days = 1–2: Requires a confirmed bearish divergence between price and RSI within the last two trading sessions — capturing setups with weakening momentum and reversal potential.

These filters collectively ensure each result is a technically valid, high-probability short setup backed by recent divergence and a clear downside path.

Metrics Used​

AI Strategy and Setup Quality​

  • AI - Alpha Strategy: Shows AI-detected short setup bias based on real-time structure
  • AI - Risk/Reward: Estimates potential downside vs stop using AI-defined target zones
  • AI - Path to Target: Counts remaining barriers to the downside target — only setups with 0–1 are shown

Momentum and Divergence Behavior​

  • RSI Divergence 14 Days: Tracks bearish divergence — including hidden divergence — between price and the 14-day RSI. Measures confirmation status and days since confirmation to assess signal strength.
  • Universal Pattern Detection: Confirms technical alignment through bearish-only pattern detection, reinforcing the divergence signal
  • Tight Range: Flags recent price compression that may release into stronger downside momentum

Volume and Liquidity​

  • Volume All Hours: Tracks total activity across all sessions for liquidity confirmation
  • Relative Volume: Highlights abnormal trading volume supporting breakdowns
  • Dollar Volume Rank: Sorts by capital flow to ensure visibility and tradability

Sector and Theme Context​

  • Industry Rating 1 Day, Theme Rating 1 Day: Validate group-level momentum aligning with short bias
  • Industry Rating 1 Year, Theme Rating 1 Year: Provide broader context for longer-term weakness
  • Relative Strength 1 Day, Relative Strength 1 Year: Surface candidates underperforming over multiple timeframes

Fundamentals and Timing​

  • MarketAlpha Rating: Overall composite strength metric across fundamentals and technicals
  • EPS Rating, Sales Rating, Profit Rating: Help assess sustainability of weakness based on financial trends
  • Accumulation/Distribution Score: Tracks institutional flow — declining values support breakdown bias
  • 52 Week High (%): Helps identify setups well below highs with room for continued downside
  • Next Earnings In Days: Contextualizes event risk and timing for short entries

Default Sorting Logic​

Results are sorted by Dollar Volume Rank (ascending) to highlight the most active and liquid short opportunities with confirmed bearish divergence and structural alignment.

Practical Use Cases​

  • Identify reversal-style short setups following recent bearish RSI divergence
  • Build watchlists of weak names breaking down after exhaustion or trend reversal
  • Visually confirm divergence and structure using Multi-Charts
  • Track group and theme momentum to strengthen short thesis
  • Use divergence status and recency to prioritize timely opportunities
  • Combine with other setups to find aligned shorts across market conditions