A Chinese Stock Screen for Reversal Candles, Trading Range, and Valuation

Summary

This Chinese A-share screening proposal combines a daily range threshold, a reversal or engulfing-style candle condition, and a circulating market capitalization between 5 and 10 billion yuan. Its expanded version adds upward alignment of short moving averages, above-average trading volume, and trailing price-to-earnings below 30. The document also provides example indicator formulas and a Python outline, though the implementation details may not precisely match the stated rules.

The author characterizes the market-cap filter as a conservative way to avoid the smallest companies and some highly volatile stocks, while warning that it may miss stronger gains in a rising market. Monetary policy and broader market conditions can affect outcomes. The text gives no backtest or performance evidence; it suggests adding other indicators or machine learning, but does not demonstrate that these changes improve results.

Key ideas

• The initial screen looks for a daily price range above 1%, a reversal candle, and circulating market capitalization from 5 to 10 billion yuan.
• The expanded screen also requires bullish moving-average alignment, volume above its recent average, and trailing P/E below 30.
• The document warns that the conservative market-cap filter may miss opportunities during strong rallies.
• No historical performance results are provided, and the example code may not fully implement every stated condition.

Tags

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