Trade Idea -RRGB (Short)

As I've mentioned, coding a scan for divergences is one of the most difficult things to code because of a series of variables concerning the divergence length and depth vs. the fixed indicators that you have to use to identify divergences. No one has come up with a great way to look for divergences using a scan that works across multiple timeframes, but I've made some progress over the weekend and this is one that popped out of the scan.

 RRGB is at what might be called a double top, although not textbook, it's n an interesting place with regard to probabilities, risk/reward and timing. The stock has rather low volume, but not horribly so and it's optionable. Two setups are apparent, one in which RRGB can't break resistance here and moves lower and the other in which t does break resistance and likely forms a false breakout (which can be confirmed at the time. The second option would be better.

The Daily RSI is negative and Stochastics is overbought, a good signal for a stock topping.

 The hourly 3C chart is negative, so there's apparently some negative action underlying price.

 The 15 and 10 min harts are also negative.

And the 5 min chart is very negative. There's good confirmation among multiple timeframes.

I would set both an upside alert in the case of a false breakout (around $38.60) and a downside alert in case of a failure. If you use the swing method, then look for a closing candle (as of today) with a high below $37.51. Otherwise, you might look for a false breakout or a close below the uptrend line around $37.00