A-Share Screen Using RSI, Capital Flow, and Moving Average Alignment

Summary

This note describes a Chinese equity screening approach requiring the 20-day moving average to exceed the 120-day average, RSI to remain below 65, and capital-flow strength to rank from high to low. The moving-average relationship is used as a trend filter, while the RSI threshold is presented as a way to avoid highly extended prices. The flow measure is intended to reflect buying and selling by large investors, adding a market-activity signal to the price indicators.

The article provides formula and Python examples but no backtest results or evidence that the combination improves returns. It cautions that technical indicators omit company fundamentals and can shift with market sentiment. The example code substitutes a positive Chaikin Money Flow condition for the described ranking by capital-flow strength, so it is not an exact implementation of the stated screen. Suggested extensions include fundamental filters, additional technical indicators, and consideration of broader market conditions; these ideas are not evaluated in the note.

Key ideas

• The screen combines a short-over-long moving-average condition with an RSI ceiling and a capital-flow filter.
• The RSI threshold is intended to avoid selecting stocks that appear overly extended.
• The article does not report backtest evidence for the proposed rules.
• Its code example uses a positive money-flow condition instead of ranking capital-flow strength as described.
• Technical signals can miss fundamental information and may behave differently as market conditions change.

Tags

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