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Setups - Green to Red

Overview​

The Setups - Green to Red profile highlights stocks that opened strong, gapped up, and then fully reversed below the previous day's close. These are failed strength setups that can turn into clean short opportunities when volume, structure, and downside follow-through all start to align.

Every result must also meet liquidity, volatility, and strategy-quality requirements, so the profile stays focused on names with a clearer downside path rather than random gap fades.

info

This profile updates in real time and applies filters automatically to surface reversal-style short setups after failed gap-up opens. It is most relevant during the regular market session.

Strategy Focus​

  • Capture gap-up failures where early strength breaks down and price flips below the previous close
  • Focus on short setups with favorable risk/reward and fewer barriers on the way to the projected downside target
  • Prioritize liquid, volatile names that can sustain intraday downside movement
  • Confirm reversal conditions with volume, momentum, and broader group weakness
  • Reduce noise by filtering for structured short opportunities instead of every weak intraday fade
  • Build watchlists around timely green-to-red reversals that can continue into the close

Filters Applied​

This profile applies multiple layers of filters to keep the results focused on failed gap-up reversals with cleaner downside structure:

  • Liquidity Rating > 70, ATRP 14D ≥ 0.5, Volatility (Month) ≥ 1: Ensures each stock is active enough to support clean entries and follow-through.
  • Volume All Hours ≥ 50K OR Relative Volume ≥ 2: Requires either meaningful total trading activity or unusually strong activity relative to normal levels.
  • AI - Alpha Strategy = Short: Requires MarketAlpha to detect a short-biased setup.
  • AI - Risk/Reward ≥ 2, AI - Path to Target ≤ 1: Keeps only setups with strong downside potential relative to risk and few barriers between price and target.
  • Gap (%) > 1: Requires a meaningful gap up versus the previous close.
  • Last Price < Close -1D ($): Confirms that the gap-up move has fully reversed intraday.

These combined filters keep the profile centered on high-quality green-to-red reversals with cleaner downside structure.

Metrics Used​

Strategy Metrics​

  • AI - Alpha Strategy: Shows whether MarketAlpha currently identifies the setup as short-biased.
  • AI - Risk/Reward: Measures the projected downside relative to the stop.
  • AI - Path to Target: Counts how many important barriers remain between price and the projected downside target.

Price Action and Reversal Context​

  • Change Pre Market (%): Adds context around the early move that contributed to the initial gap.
  • Change From Close (%): Tracks whether the reversal has already pushed decisively below the prior close.
  • RSI Divergence 14 Days: Helps identify weakening momentum or additional bearish reversal context.
  • Universal Pattern Detection: Adds bearish pattern confirmation where relevant.
  • Tight Range: Helps highlight setups where compression preceded the failed move.

Volume and Liquidity​

  • Volume All Hours: Confirms participation across all sessions.
  • Relative Volume: Helps show whether the reversal is supported by stronger-than-normal activity.
  • Dollar Volume Rank: Keeps the most liquid and actively traded names near the top.

Group and Relative Strength Context​

  • Industry Rating 1 Day, Theme Rating 1 Day: Show whether short-term group action also supports the downside move.
  • Industry Rating 1 Year, Theme Rating 1 Year: Add longer-term group context behind the setup.
  • Relative Strength 1 Day, Relative Strength 1 Year: Help compare short-term and long-term weakness.

Fundamentals and Timing​

  • MarketAlpha Rating: Composite view of overall technical and fundamental quality.
  • EPS Rating, Sales Rating, Profit Rating: Help show whether weaker business performance also supports the bearish setup.
  • Accumulation/Distribution Score: Tracks institutional flow, where weaker readings can reinforce downside pressure.
  • 52 Week High (%): Shows how far the stock is from its yearly high, helping frame downside room.
  • Next Earnings In Days: Adds timing context around possible catalyst risk.

Default Sorting Logic​

Results are sorted by Dollar Volume Rank (ascending) to keep the most liquid and active green-to-red setups at the top.

Practical Use Cases​

  • Find green-to-red reversals that have already lost the prior close
  • Focus on short candidates with cleaner downside structure and stronger reward-to-risk
  • Monitor failed gap-up opens that are turning into real reversal trades
  • Build watchlists of liquid stocks showing fresh intraday breakdown behavior
  • Strengthen short-side review with volume confirmation, group weakness, and strategy metrics
  • Use Multi-Charts to validate reversal structure, momentum loss, and downside follow-through