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Setups – Bullish RSI Divergence

Overview​

The Setups – Bullish RSI Divergence profile filters for confirmed long setups where the Relative Strength Index (RSI) has diverged positively from price action, signaling a potential reversal or continuation of a bullish move. Each ticker must also meet volume, volatility, and structural requirements with low resistance toward the target price. Divergences must have been confirmed within the last 2 trading sessions.

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This profile is updated in real time and applies filters automatically to highlight long setups with confirmed bullish divergence. It can be used across all market sessions.

Strategy Focus​

  • Surface long-biased setups with recent, confirmed bullish RSI divergence
  • Focus on clean technical reversals where price moves opposite to weakening RSI, then confirms upward
  • Combine structural criteria (low resistance, strong risk/reward) with behavioral reversal signals
  • Validate with volume, volatility, and group context to ensure tradeability
  • Use to catch early recoveries, hidden strength, or follow-through after divergence confirmation
  • Deploy across pre-market, regular, or post-market sessions without restriction

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: Confirms that each stock is tradable and volatile enough for breakout or recovery setups to follow through.
  • AI - Alpha Strategy = Long: MarketAlpha AI confirms a long-bias setup based on price behavior and structure.
  • AI - Risk/Reward ≥ 2, AI - Path to Target ≤ 1: Ensures a favorable trade structure with minimal resistance toward the upside target.
  • Bull RSI Divergence Days = 1–2: Requires a confirmed bullish RSI divergence signal that occurred within the past two sessions — highlighting timely opportunities with momentum reversal potential.

These filters combine to highlight technically aligned reversal setups with supporting structure and recent divergence confirmation.

Metrics Used​

AI Strategy and Setup Quality​

  • AI - Alpha Strategy: Identifies long-biased setups based on MarketAlpha’s AI-driven structure detection
  • AI - Risk/Reward: Quantifies upside potential relative to stop level and target zone
  • AI - Path to Target: Measures the number of resistance zones remaining to the target — capped at 1 in this profile

Divergence and Technical Signals​

  • RSI Divergence 14 Days: Tracks bullish or bearish divergence — including hidden divergence — between price action and the 14-day RSI, using regular session closing prices. Shows whether divergence is confirmed or unconfirmed and how many days have passed since confirmation.
  • Universal Pattern Detection: Confirms setups supported by bullish-only technical patterns, reinforcing directional alignment with the RSI signal.
  • Tight Range: Flags recent compression zones, often preceding breakout moves

Price Action and Volume Context​

  • Change Pre Market (%): Captures overnight behavior to contextualize pre-session setups
  • Change From Close (%): Measures movement from the previous day’s close during regular hours
  • Volume All Hours: Total trading volume across all sessions
  • Relative Volume: Detects stocks trading at above-normal activity
  • Dollar Volume Rank: Prioritizes the most liquid, institutionally visible names

Sector and Theme Context​

  • Industry Rating 1 Day, Theme Rating 1 Day: Show current momentum within industry or thematic groupings
  • Industry Rating 1 Year, Theme Rating 1 Year: Offer long-term alignment with leadership or tailwinds
  • Relative Strength 1 Day, Relative Strength 1 Year: Evaluate relative performance over both short and long timeframes

Fundamentals and Timing​

  • MarketAlpha Rating: Composite score reflecting AI-evaluated technical and fundamental strength
  • EPS Rating, Sales Rating, Profit Rating: Identify financially sound names likely to support sustained upside
  • Accumulation/Distribution Score: Highlights recent institutional positioning over the past quarter
  • 52 Week High (%): Shows proximity to breakout zones or recovery potential
  • Next Earnings In Days: Contextualizes short-term risk relative to earnings releases

Default Sorting Logic​

Tickers are sorted by Dollar Volume Rank (ascending) to prioritize highly liquid names first. This makes it easier to focus on setups with high visibility and reliable trade execution.

Practical Use Cases​

  • Catch early-stage long setups triggered by bullish divergence with low overhead resistance
  • Focus on structurally sound names recovering from prior weakness or building breakout potential
  • Build long watchlists across sessions based on AI and RSI signal convergence
  • Open results in Multi-Charts to visually validate divergence, support, and trend integrity
  • Combine with group strength or volume filters to find high-conviction trade candidates
  • Use when screening for short-term reversals with well-defined upside targets