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Setups – Gap Up

Overview​

The Setups – Gap Up profile highlights stocks that gapped up above the previous day’s high with a favorable breakout context. These setups also meet criteria for liquidity, acceptable volatility, and clean follow-through structure. To qualify, tickers must have gapped through a resistance zone, from a tight range, or from a 3-day breakout pattern — all validated by MarketAlpha’s AI.

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This profile is updated in real time and applies filters automatically to surface clean, liquid gap-up setups with favorable pattern context. It can be used across all market sessions, but is most effective during pre-market and early regular session hours when gap conditions first emerge.

Strategy Focus​

  • Identify stocks that gapped above the prior day’s high and showed structural follow-through
  • Focus on clean long setups with minimal barriers between price and the AI-identified target
  • Filter for favorable patterns: gaps through resistance, breakouts from ranges, or recent multi-day base patterns
  • Ensure setups are liquid, volatile enough to move, and AI-rated for strong risk/reward
  • Validate trend strength using real-time group and theme metrics
  • Prioritize high-conviction continuation setups with proven price power and technical alignment

Filters Applied​

The following filters are applied automatically in this profile:

  • Liquidity Rating > 70: Ensures the stock is sufficiently liquid for smooth order execution and reliable price discovery.
  • ATRP 14D ≥ 0.5 and Volatility (Month) ≥ 1: Selects stocks with meaningful price movement and volatility to support follow-through after a gap.
  • AI - Alpha Strategy = Long: Only includes setups where the AI has identified a long (bullish) directional bias based on structure and context.
  • AI - Risk/Reward ≥ 2: Ensures a favorable setup where the expected reward is at least double the downside, based on stop and target zones.
  • AI - Path to Target ≤ 1: Limits results to stocks with one or fewer remaining barriers to the AI-defined target, supporting smooth continuation.
  • Gap Hi/Low (%) > 0: Filters for stocks that gapped up over the previous day's high, an essential trait of this profile.
  • Gap To Res/Sup Contains R, Tight Range = Yes, 3 Days BreakOut/Dn = Breakout: Requires the setup to meet at least one of these structural pattern conditions:
    • The gap occurred above a major resistance area
    • The stock broke out from a tight price range
    • The stock broke out of a 3-day consolidation pattern

Together, these filters isolate clean, liquid gap-up setups supported by breakout conditions, volume, and structure.

Metrics Used​

AI Strategy and Setup Quality​

  • AI - Alpha Strategy: Displays AI-generated long bias for each setup based on real-time structure
  • AI - Risk/Reward: Estimates reward vs risk using AI-defined stop and target zones, with only 2:1+ setups shown
  • AI - Path to Target: Counts resistance barriers between price and target — limited to one or fewer for clean follow-through

Price Action and Breakout Context​

  • Change Pre Market (%): Captures overnight price strength that may trigger or extend the gap
  • Change From Close (%): Measures intraday continuation strength following the gap
  • RSI Divergence 14 Days: Flags confirmed or unconfirmed RSI divergence from price, signaling potential strength or exhaustion near the gap
  • Universal Pattern Detection: Identifies technical pattern alignment supporting directional breakout setups
  • Tight Range: Detects setups breaking out of recent consolidation ahead of the gap

Volume and Liquidity​

  • Volume All Hours: Tracks total daily volume across all sessions for liquidity context
  • Relative Volume: Highlights setups trading with unusually high volume at the time of scan
  • Dollar Volume Rank: Prioritizes highly active tickers by capital flow

Sector and Theme Context​

  • Industry Rating 1 Day, Theme Rating 1 Day: Show group strength that supports continuation after the gap
  • Industry Rating 1 Year, Theme Rating 1 Year: Provide long-term macro strength backing the setup
  • Relative Strength 1 Day, Relative Strength 1 Year: Compare short- and long-term price performance relative to peers

Fundamentals and Timing​

  • MarketAlpha Rating: Overall strength signal combining technicals, fundamentals, and group factors
  • EPS Rating, Sales Rating, Profit Rating: Show consistent financial performance supporting breakout credibility
  • Accumulation/Distribution Score: Detects institutional buying/selling trends that support or weaken the breakout
  • 52 Week High (%): Shows proximity to breakout levels that may act as magnets or friction
  • Next Earnings In Days: Displays timing of next earnings event for trade risk planning

Default Sorting Logic​

Results are sorted by Dollar Volume Rank (ascending) to highlight gap-up setups in the most liquid, institutionally relevant tickers first. These stocks are best suited for clean