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Peter DiCarlo

BX Trend Momentum — DiCarlo Buy Signal

Scan 5,000+ stocks daily for DiCarlo BX Trend buy signals. Weekly and daily momentum alignment at support levels detected. Each setup graded A+ to B.

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What is this pattern?

The BX Trend system is a multi-timeframe momentum strategy developed by Peter DiCarlo that identifies high-probability entry points where weekly and daily trend signals align at a support level. The core principle is that buying pullbacks in confirmed uptrends — when the daily timeframe dips to support while the weekly timeframe remains bullish — produces the most favorable risk/reward entries.

The system works by first establishing the weekly trend direction using momentum oscillators and moving average relationships. When the weekly trend is confirmed bullish, the scanner then watches the daily timeframe for a pullback to a defined support level — typically the 21-day exponential moving average. The entry signal fires when daily momentum oscillators begin turning positive while price is at or near this support zone.

What makes the BX Trend approach powerful is its requirement for multi-timeframe confluence. Many traders fail because they trade signals on a single timeframe without context. By requiring the weekly trend to be up before acting on daily pullback signals, the system filters out the majority of false signals that occur in sideways or downtrending markets. The result is a higher win rate and better average gain per trade compared to single-timeframe approaches.

Origin & History

Developed by Peter DiCarlo, a technical analyst and trading system developer who created the BX Trend approach to combine multiple timeframe analysis with momentum oscillator alignment. DiCarlo's method built on the multi-timeframe concepts popularized by Alexander Elder in Trading for a Living (1993) and the momentum work of Welles Wilder, who invented the RSI and other oscillators in New Concepts in Technical Trading Systems (1978).

Detection Criteria

Our scanner evaluates the following criteria when detecting BX Trend Momentum — DiCarlo Buy Signal setups across 5,000+ stocks daily.

Weekly trend direction and strength
The weekly trend provides the macro context. Only taking daily signals when the weekly trend is confirmed bullish filters out the majority of false signals.
Daily pullback to support level
The pullback to support within a weekly uptrend creates the entry opportunity — buying at support in an uptrend offers favorable risk/reward.
Momentum oscillator alignment
When momentum oscillators turn positive at support, it confirms that buying pressure is resuming. This alignment across indicators increases conviction.
21 EMA proximity and slope
The 21 EMA serves as a dynamic support level in uptrends. Its slope indicates the strength of the trend — a rising 21 EMA with price pulling back to it is a high-probability setup.
Volume confirmation signals
Volume expanding as price bounces from the 21 EMA confirms that institutional buyers are defending the support level.

Grading Breakdown

For BX Trend signals, an A+ grade means the weekly trend is firmly bullish with the daily pullback reaching the 21 EMA and momentum oscillators turning positive simultaneously. This is not a prediction of future price movement — it is a way to prioritize which charts deserve your attention first.

A+
Textbook setup — strong confluence across all criteria. Highest conviction.
A
High-quality setup worth watching closely. Minor criteria may be slightly off.
B+
Decent setup with some reservations. One or two criteria fall short of ideal.
B
Pattern detected but lower conviction. Use as a watchlist candidate, not a trade trigger.

Common Mistakes to Avoid

Taking daily buy signals when the weekly trend is not confirmed bullish — the multi-timeframe alignment is what gives this system its edge
Buying extended stocks far above the 21 EMA — the entry should come at or near the 21 EMA pullback, not after the stock has already bounced significantly
Ignoring momentum oscillator divergences — if daily momentum is turning positive but weekly momentum is deteriorating, the signal is conflicted

How to Trade This Pattern

Entry

Buy when the daily pullback reaches the 21 EMA with the weekly trend confirmed bullish and daily momentum oscillators turning positive from oversold territory.

Stop Loss

Place stop below the most recent daily swing low or below the 50-day MA, whichever is closer. A break below the 50-day MA suggests the pullback has turned into something more serious.

Price Target

Target the prior swing high as the first objective. In strong weekly uptrends, the move often exceeds the prior high — trail the stop using the 10 EMA to capture the extended advance.

This is educational content only. Not financial advice. Always do your own research and manage risk appropriately.

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AskLivermore scans 5,000+ NASDAQ and NYSE stocks daily · Not financial advice · Past performance does not guarantee future results