A Breakout Stock Screen Using Range, Consecutive Limit-Ups, and a Moving Average

Summary

This document describes a Chinese equity screening rule combining daily price range, a recent run of consecutive limit-up sessions, and price above its five-day moving average. It frames the range and limit-up conditions as signs of market activity and buying interest, while the moving average acts as a basic trend filter. It also proposes adding company fundamentals and industry context, then favoring financially stable, relatively established firms.

The article provides a formula and sample implementation, but the examples do not fully match the stated rule: the formula checks prior closes rising in sequence rather than verifying three limit-up sessions, and the sample uses an inclusive range threshold. No backtest results or performance evidence are given. The rule relies heavily on price action and market sentiment, so it may miss fundamental or sector risks and can be vulnerable to regime changes, overfitting, and transaction costs.

Key ideas

• The screen combines a minimum daily range, recent consecutive gains, and price above a short moving average.
• The article interprets these conditions as proxies for activity, buying interest, and short-term trend.
• It recommends including fundamental and industry checks to make the selection process broader.
• The provided formula and sample code do not precisely implement the stated consecutive limit-up condition.
• The document identifies sentiment shifts, narrow criteria, and overlooked company risks as limitations.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.