A Chinese Stock Screen Combining RSI, Daily Gains, and Positive Earnings

Summary

This stock-selection rule screens Chinese main-board shares using four conditions: RSI below 65, a daily gain above 1%, main-board listing status, and positive static price-to-earnings ratio. The post frames the RSI threshold as avoiding an overheated reading, while the daily gain is intended to capture near-term strength. The PE filter excludes firms with negative earnings, and the market-board restriction narrows the eligible universe. It provides example screening logic and code, but no backtest, performance statistics, or comparison with a benchmark.

The post acknowledges that a screen built mainly on technical indicators and recent price movement can misread market conditions and lose money. Its explanation also makes a questionable inference by describing RSI below 65 as an oversold condition; that threshold alone does not establish oversold status. The code examples introduce additional filters, including size, price-to-book, and an upper PE bound, so the implementation is not identical to the headline rule. The strategy should therefore be treated as a proposed screen rather than evidence of reliable excess returns. The author suggests adding other data and risk controls, but does not test those changes.

Key ideas

• The proposed screen requires RSI below 65, a daily rise above 1%, main-board status, and positive static PE.
• The post combines a recent price move with technical and basic eligibility filters.
• The accompanying code adds filters beyond those stated in the headline rule.
• No historical performance evidence is provided, and the post notes that market conditions can lead to losses.
• An RSI below 65 does not by itself establish that a stock is oversold.

Tags

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