Chart patterns and candlestick setups
Does RSI rising while price stays flat mean accumulation?
Rejected Pre-registered and tested, July 2026
The same RSI lift, where price confirmed it instead of contradicting it, performed better.
What the pattern claims
The Relative Strength Index climbs by 10 or more points over five sessions while price itself goes essentially nowhere — up no more than 1% net. The claim is quiet accumulation: momentum building under a flat price, before the move becomes visible.
How we tested it
1,880 occurrences on S&P 500 companies. Individual days within the window were unconstrained; the cap applied to the net five-day move.
Every study here was pre-registered: the exact rule, the pass and fail thresholds and the data window were written down and cryptographically fingerprinted before the test was run. That makes it impossible to move the goalposts after seeing the answer.
Results assume you buy at the next morning's open, not at the closing price that triggered the signal, and they include companies that were later delisted or went bust. Returns are measured against what the rest of the market did on the same days, so a rule that made money only because it fired on days everything rose scores zero here.
What happened
−0.70% at 60 days over the full period.
The pattern is worse than either of its own halves. An RSI lift with no price condition returned −0.29%. A flat price with no RSI condition returned −0.26%. Doing nothing returned −0.26%. Combining the two returned −0.70%. The price cap is the clause destroying it, subtracting roughly 0.4 percentage points from an RSI lift that was already going nowhere.
What it means
The decisive comparison is against the setup's mirror image. We took exactly the same 10-point RSI lift, but kept only the cases where price did advance more than 1% — the version the hypothesis says should be worse, because the divergence is gone.
It returned −0.29%, about 0.4 percentage points better.
So oscillator strength that price confirms beats oscillator strength that price contradicts. That is the exact opposite of what divergence-based reasoning predicts, and it is consistent with what the MACD divergence study found by a different route. The appeal of divergence is that it promises to tell you something before the price does. On this evidence, when the indicator and the price disagree, the price is the one worth listening to.
A rejection is not "this never works"
It means: tested on this universe, over this period, against a bar written down in advance, it did not clear the bar. Where a test lacked the power to decide either way we record it as undecided rather than rejected. The full research ledger has all 192 experiments and what the failures have in common.
Other patterns we tested
- Does the bull flag pattern work? The pole is the only live part of the pattern. Every flag condition made the result worse.
- Does MACD divergence work? The loose version changed the outcome by less than one hundredth of a percent. The strict version widened both tails.
- Does breakout and retest work? The setups the rule throws away outperformed the ones it keeps.
- Does buying the dip after a spike work? The first pattern in this family to lose money significantly rather than merely do nothing.
- Does a big RSI drop mark a buying opportunity? The family's only statistically significant result, and it vanished completely once we accounted for when it fired.
- Do three shrinking red candles signal a bottom? The only chart pattern that beat all its own control groups — and it still could not clear the error bars.