A Stock Screen Combining Amplitude, RSI, Turnover, and Valuation

Summary

This article outlines a stock selection rule based on daily price amplitude above 1, RSI below 65, and turnover from 3% to 12%. Its final proposed version also includes a price-to-earnings ratio below 30. The explanation treats amplitude as a measure of price movement, RSI as a filter against stronger overbought readings, and turnover as a trading-activity criterion. Formula examples show how the indicators could be calculated, but the document reports no backtest or realized returns.

The article notes that the filters do not adequately assess company fundamentals or industry prospects and may select lower-quality firms. It also warns that reliance on technical indicators can encourage excessive trading, raising costs and risk. Fundamental and industry information, additional indicators, or revised turnover thresholds are offered as possible refinements. The text does not specify how positions are entered, sized, exited, or managed, so the screen alone is not a complete strategy.

Key ideas

• The proposed screen requires amplitude above 1, RSI below 65, and turnover between 3% and 12%.
• The final selection rule adds a price-to-earnings ratio below 30.
• The article supplies indicator formulas but no tested performance evidence.
• It warns that technical filters can overlook business quality and industry conditions.
• Excessive trading and related costs are identified as risks.

Tags

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