ReversalDown_Overbought
Overbought reversal with volume spike and bearish divergence or weakening bull
Setup — what must already be true
- Price vs EMAs is Above Both
- RSI regime is one of Overbought / Extreme Overbought
- Liquidity gate is Pass
Trigger — what fires the signal
- Momentum trajectory (RSI + MACD direction) is one of Both Deteriorating / Mixed
- Volume vs 20-day average ≥ 1.3 (HK: 1.1, SG: 1.2)
- any of: RSI divergence is Bearish Divergence — or — MACD histogram is one of Weakening Bull / Bearish
Trade box & conviction bar
- Entry: market
- Stop: reversal high (2 ATR)
- Target: fixed
- Time stop: 8 bars
- Conviction: BUY-grade at ≥ 70, STRONG at ≥ 85 — a counter-trend family, so the bar is deliberately higher than the default 55/75
📰 From the newsletter
- Issue #7-3 · Speed, Not Prophecy: Momentum Indicators — Momentum indicators measure the speed of price movement, not the certainty of a reversal. Using too many of them often creates redundancy rather than confirmation.
Live track record for this signal
- US Main (sell): 50% hit the 1-week target (n=2, building sample)
- AI · US Tech (sell): 0% hit the 1-week target (n=1, building sample)
- AI · US Semiconductors (sell): 0% hit the 1-week target (n=1, building sample)
- Hong Kong Main (sell): 33% hit the 1-week target (n=3, building sample)
- AI · HK Tech (sell): 100% hit the 1-week target (n=1, building sample)
- AI · HK Financials (sell): 40% hit the 1-week target (n=5)
- Singapore Main (buy): 0% hit the 1-week target (n=1, building sample)
No name is firing this signal on the current scans — check a book's Explore tab to browse live charts.