A Trend and RSI Stock Screen With a Two-Day High Filter

Summary

This article proposes screening stocks where the 20-day moving average is above the 120-day moving average, the latest high is the highest across two days, and the 14-period RSI is below 65. The moving-average comparison is intended to identify a longer-term upward trend, while the high filter and RSI threshold constrain the short-term setup. The document includes formula references and a Python example that also sorts selected names by turnover ratio.

The author warns that the screen ignores fundamentals and relies on only a few technical inputs, and suggests considering company fundamentals or adjusting indicator periods. The example says to skip histories shorter than 40 observations despite using a 120-day average, which limits its ability to implement the stated long-term condition as written. No backtest or performance evidence is given, so the screen is an unvalidated selection rule rather than proof of expected returns.

Key ideas

• The screen requires the 20-day moving average to exceed the 120-day moving average.
• It also selects stocks whose latest high matches the two-day maximum and whose 14-period RSI is below 65.
• The sample implementation ranks candidates by turnover ratio.
• The author notes that the rule omits fundamentals and relies on a small set of technical indicators.
• The sample history-length check is insufficient for a 120-day moving average, and no performance results are reported.

Tags

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