Divergence Stack Scanner

The Divergence Stack Scanner indicator is a multi-oscillator decision engine that scans RSI, MACD Histogram, CCI, MFI, and OBV to identify high-conviction reversal zones through divergence confluence. By grading confirmed pivots with a 0 to 5 stack score, the tool isolates rare market inflection points where momentum and volume oscillators align, providing an objective measure of reversal probability.

Usage

The tool is primarily used to identify market reversals by looking for "stacks" where multiple oscillators show divergence at the same price pivot.

• Strict Stacks: A 5/5 score marked with a star indicates all five oscillators diverged on the exact same pivot bar. These are considered high-conviction signals.
• Window Stacks: Identified as "NEAR" labels, these occur when oscillators diverge within a user-defined bar tolerance (e.g., 3 bars). These serve as secondary confirmation or early warnings.
• Pressure Zones: When a stack meets the minimum threshold (default 4/5), the tool draws a rectangular zone forward. These zones act as support/resistance levels for re-entry or stop-loss placement.
• Live Dashboard: Use the panel to monitor the "live state" of each oscillator to see which are currently diverging and the rolling win rate to gauge the tool's current effectiveness on the specific asset and timeframe.

Details

The script utilizes a non-repainting pivot detection method (default 5-bar lookback). When a pivot is confirmed, the engine compares price action against five independent oscillators:

1. RSI: Momentum-based strength.
2. MACD Histogram: Trend velocity and acceleration.
3. CCI: Statistical deviation from the mean.
4. MFI: Volume-weighted momentum.
5. OBV: Cumulative volume flow.

The "Ready Score" (0-100) incorporates swing quality and trend context, while the optional SMT (Smart Money Technique) module allows for inter-market analysis by comparing the current chart against a correlated symbol (e.g., XAUUSD vs. XAGUSD).

Settings

Core Engine

• Pivot Lookback: Number of bars required on each side to confirm a price pivot.
• Oscillator Lengths: Individual length settings for RSI, MACD, CCI, and MFI.

Decision Engine

• Sensitivity: Sets the strictness of the readiness model (Conservative, Balanced, Aggressive).
• Minimum Stack Level: The number of oscillators (1-5) required to display a signal.
• Window Tolerance: The maximum bar distance allowed between different oscillator divergences to count as a "stack."
• Confirmation Mode: Determines if the signal triggers on the pivot confirmation, a candle close, or a strict EMA reclaim.

SMT & Visuals

• Enable SMT Divergence: Activates correlation analysis with a secondary symbol.
• Pressure Zones: Settings for ATR-based height, extension length, and maximum active zones.
• Panel Layout: Options for location, theme (Dark/Light), and font size.

FAQ

How do I interpret the star icons on the chart? A star icon indicates a "Strict Stack," meaning all monitored oscillators triggered a divergence on the exact same price bar, representing the highest level of confluence.

What is the difference between a READY and a WATCH label? A READY label indicates that the divergence stack has met the minimum score and confirmation requirements, while a WATCH label suggests a high-quality setup is forming but has not yet met all confirmation criteria.

How can I access the Divergence Stack Scanner? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.