A-Share Screen Using RSI, MACD, and the Outer-to-Inner Volume Ratio

Summary

This note describes a technical screen for Chinese stocks using three conditions: RSI below 65, an outer-to-inner market volume ratio above 1.3, and MACD above zero. The accompanying examples explain indicator calculations and outline a Python workflow that obtains a stock list, filters on RSI, estimates the volume ratio from daily price and volume data, and checks MACD. The title refers to an outer-to-inner ratio greater than one, while the article body specifies 1.3; the body also includes MACD despite its omission from the title.

The rationale is to combine a bounded momentum reading, buying-side volume pressure, and positive MACD. The author cautions that technical indicators can be overused, that market style changes can weaken the screen, and that results may vary between bullish and bearish conditions. Fundamental and industry analysis, stop and take-profit rules, diversification, and monitoring market conditions are suggested as safeguards. No backtest or performance evidence is presented, and the volume ratio is an estimate based on price positioning within the daily range rather than direct trade classification.

Key ideas

• The stated screen requires RSI below 65, an outer-to-inner volume ratio above 1.3, and MACD above zero.
• Its example code estimates outer and inner volume from daily price range and trading volume.
• The note warns that indicator-based rules can lose reliability as market styles and conditions change.
• It suggests adding fundamental context, risk controls, diversification, and market monitoring.
• No empirical results are provided, and the title's ratio threshold differs from the body.

Tags

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