RSI Bullish Divergence
A bullish RSI divergence occurs when price makes a lower low but the Relative Strength Index makes a higher low. The new price low is not confirmed by momentum, suggesting selling pressure is weakening even as price falls.
- Bias
- Bullish
- Category
- Momentum Indicators
- Scan cadence
- Every close
What has to be true for a RSI Bullish Divergence to trigger
- Two distinct price lows, the second lower than the first
- Corresponding RSI lows, the second higher than the first
- Enough separation between the lows for the divergence to be meaningful
- RSI in a region where the divergence carries weight
How PatternGrade grades it
A wider divergence between the price and RSI slopes, and cleaner, better-separated pivots, raise the grade.
Every scanner grades its hits A+, A or B from the pattern's own measurable structure. The grading is deterministic — the same chart always produces the same grade. It describes how closely the chart matches the pattern, not how likely anything is to happen; no hit rate or probability is attached to a grade. The reasoning is set out in the methodology.
What a RSI Bullish Divergence looks like in practice
A stock makes a low of $24.10 in early March with RSI reading 22. It bounces to $28, then sells off again to $23.40 in mid-April, a lower low in price, but RSI this time bottoms at 31. Price went lower; the momentum measure did not. The second low also comes on about half the volume of the first.
How a RSI Bullish Divergence fails
Divergence persists while price keeps falling. This is the pattern's defining weakness: divergences can extend for months, printing three or four successively higher RSI lows against successively lower price lows, and every one of them looks like a signal. Divergence indicates decelerating momentum, and decelerating is not the same as reversing. A stock can fall more slowly for a very long time.
What this pattern is telling you
Divergence is notorious for appearing repeatedly during a sustained decline. A stock can print several bullish divergences on the way down.
PatternGrade is not a financial advisor and does not give buy or sell recommendations. Targets and stops shown on a pattern are reference levels derived from its geometry, not advice.
How to scan for RSI Bullish Divergence setups
PatternGrade rescans every liquid US stock (~4,500 names) for this pattern after every close and returns the hits as a graded list, with the pattern drawn on each chart, so you review setups rather than hunt for them.
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RSI Bullish Divergence FAQ
What is bullish RSI divergence?
Price makes a lower low while RSI makes a higher low. Momentum fails to confirm the new price low, which suggests selling pressure is fading.
How reliable is RSI divergence?
It signals weakening momentum, not a reversal. Divergences frequently repeat during strong downtrends, so most traders wait for price confirmation.
What is bullish RSI divergence?
Price makes a lower low while the Relative Strength Index makes a higher low. The interpretation is that the second decline had less downside momentum behind it than the first, even though it reached a lower price.
How reliable is divergence?
It is a genuine observation about momentum and a notoriously poor timing tool. Divergences routinely extend, and acting on the first one in a strong downtrend is a well-known way to lose money slowly. It is most useful as a supporting condition alongside a price structure, not as a trigger.
How far apart should the two lows be?
Far enough that they are distinct swing lows rather than noise, usually at least a couple of weeks on daily bars. Divergences measured between two lows three days apart are largely artefacts of the indicator's smoothing.
Does the RSI need to be oversold?
Not strictly, but a divergence where the first low reached genuinely oversold territory is stronger, because it means the initial decline was extreme and the second was not. PatternGrade weights the absolute RSI levels alongside the divergence itself.
Patterns a RSI Bullish Divergence is mistaken for
- Double Bottom
- A double bottom is a price structure with two lows at similar levels. Divergence compares price lows against indicator lows and requires price to make a lower low.
- MACD Bullish Cross
- A crossover event on one indicator. Divergence is a comparison between price and indicator across two separate lows.
- RSI Bearish Divergence
- The mirror at highs: price making a higher high while RSI makes a lower one.
- Selling Climax
- A climax is a volume and price event at a single moment. Divergence requires two lows separated in time.
Last reviewed . Structure and grading for the RSI Bullish Divergence are reviewed against the scanner's own rules.