A Chinese Stock Screen Combining Amplitude, Rounded Bases, and Reversals

Summary

This Chinese-language post proposes screening stocks using three ideas: amplitude greater than one, a rounded price shape, and an engulfing or reversal pattern. Its formula approximates the rounded-shape condition by comparing the prior close with the recent five-period range, while also requiring the current close to sit within its twenty-period high–low range. The post characterizes amplitude as a way to find active stocks and reversal patterns as potential buy or sell signals.

The author flags that large-cap opportunities may be missed and that rounded shapes and reversal labels can be subjective. Suggested improvements include adding industry or fundamental filters and defining pattern conditions quantitatively. The article supplies screening logic but no backtest, performance results, or detailed evidence that the conditions predict returns. Its description of the reversal concept is broad, and the proposed screen needs precise definitions, universe rules, and out-of-sample testing before it can support a trading decision.

Key ideas

• The proposed stock screen combines an amplitude threshold with rounded-shape and reversal conditions.
• The formula approximates the rounded shape using a recent price range and constrains the close within a longer range.
• The post identifies subjectivity in pattern interpretation as a source of operational uncertainty.
• Adding industry or fundamental filters is suggested as a possible refinement.
• No backtest or evidence of predictive performance is presented.

Tags

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