A Stock Screen Combining Reversal Patterns, Daily Range, and Relative Volume

Summary

This A-share stock selection idea combines a daily high-to-low range above one percent, a reversal or engulfing-style price pattern, and relative volume between 1.5 and 6. The article’s refined version also requires a positive current return and suggests considering analyst recommendations and industry trends. It provides indicator formula and Python examples for applying the filters, though the implementations differ in some details, including how the reversal pattern and volume baseline are computed.

The author presents the volume band as a way to filter unusual activity while retaining stocks with stronger-than-average trading. The article warns that a small portfolio may be exposed to concentrated market risk, that strict filters may overemphasize short-term signals, and that fundamental performance can be overlooked. It recommends broadening the portfolio and relaxing some conditions, but reports no backtest, measured returns, or validation of the signal. The screen is therefore a technical selection recipe, not evidence that selected stocks will outperform.

Key ideas

• The screen requires a daily high-to-low range greater than one percent and a reversal pattern.
• Relative volume must be above 1.5 and below 6 in the stated selection logic.
• The refined rules add a positive current return and suggest reviewing industry and fundamental information.
• The article flags concentration risk and possible overreliance on short-term technical conditions.
• No backtest or performance evidence is provided.

Tags

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