A Stock Screen Combining RSI, Seven Down Days, and Positive P/E

Summary

The proposed stock screen selects shares with RSI below 65, seven consecutive sessions in which the close is no higher than the open, and a positive price-to-earnings ratio. It combines a technical condition and a valuation filter, with the down-day sequence identifying recent weakness and the RSI threshold limiting the eligible set. The document also gives illustrative references for calculating RSI and trailing P/E, along with sample implementation guidance.

The author warns that technical signals can misclassify stocks and that positive P/E alone does not amount to full fundamental analysis. Suggested refinements include considering additional financial, industry, and market factors, combining other technical measures, and backtesting and periodically adjusting parameters. No test results or evidence of profitability are reported, and the screen should be treated as a selection hypothesis rather than a validated strategy.

Key ideas

• The screen requires RSI below 65, seven consecutive down sessions, and positive P/E.
• It combines recent price behavior with a basic valuation filter.
• The article cautions that RSI and a down-day streak can produce false signals.
• A positive P/E does not replace broader financial and industry analysis.
• Backtesting and parameter review are recommended, but no performance results are shown.

Tags

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