How to Scan for Chart Patterns Across the Market

Finding a great chart pattern is only the beginning. The real edge comes from efficiently scanning a universe of hundreds of stocks, filtering for momentum confirmation, and arriving at a short list of the highest-conviction setups — all before the market opens.

This tutorial walks you through the exact workflow.

What You'll Accomplish

By the end of this tutorial, you will be able to:

• Scan the S&P 500 (or any other universe) for specific geometric chart patterns
• Filter results by momentum indicators for confluence confirmation
• Check the broader market context to confirm your directional bias
• Drill into the highest-conviction setups with a complete technical analysis
• Verify there are no upcoming catalysts that could disrupt the technical setup

Step 1: Choose Your Pattern and Universe

Start by deciding what type of setup you are looking for. Different patterns work better in different market environments:

• Bull Flag / Cup and Handle — Best in uptrending markets with strong breadth
• Inverse Head and Shoulders — Best as a reversal play after a sustained downtrend
• Ascending Triangle — Best in consolidating markets with bullish bias

For this tutorial, we'll scan for Bull Flags across the S&P 500 on the daily timeframe.

Diplyzer will return a list of matching stocks with their similarity confidence scores and the date range of the pattern.

Step 2: Filter for Momentum Alignment

A chart pattern alone is not enough. You want momentum confirming your directional thesis:

This filter removes setups where momentum is already extended (RSI above 70) or where the MACD isn't confirming bullish pressure. You'll typically narrow the list from 20-30 results to 5-8 high-quality setups.

Step 3: Check the Broader Market Context

Even the best individual stock setup can fail in a hostile market environment:

If the market is:

• In an uptrend with RSI 40-65 — Favorable environment for long setups
• Overbought (RSI above 70) or showing distribution — Be more selective; setups may fail even if technically sound
• VIX above 25 — Elevated fear/volatility; tighten position sizing

Step 4: Deep-Dive the Best Candidates

Pick the top 2-3 candidates from your filtered list and request a complete analysis:

Look for:

• Clear flagpole (sharp prior move) and well-formed flag (orderly pullback)
• Entry zone: Just above the upper boundary of the flag (the breakout level)
• Target: The flagpole length projected upward from the breakout point
• Stop placement: Below the lowest point of the flag consolidation

Step 5: Check Upcoming Catalysts

Before entering any trade, verify there are no scheduled catalysts that could override the technical setup:

If earnings are within 2-3 weeks: Either skip the trade or size very small — the technical target may not be reached before the binary earnings event.

If the calendar is clear: Green light to proceed with your technical setup.

Step 6: Confirm Volume Profile

The final check — volume:

Ideal Bull Flag characteristics:

• ✅ Flagpole on significantly above-average volume (institutional buying)
• ✅ Flag consolidation on decreasing, below-average volume (natural digestion)
• ✅ Volume spike expected on breakout (confirms institutional participation)

The Complete Pattern Scan (Single Prompt)

Once you're comfortable with the workflow, compress it into a single comprehensive request:

Variations: Other Pattern Scans to Try

Scanning for reversal opportunities:

Scanning for continuation plays in crypto:

Scanning for value with technical timing: