A Turnover and Seven-Day Decline Screen with a Reversal Trigger

Summary

This document presents an equity selection rule using a turnover range of 3% to 12%, seven consecutive down days, and a pattern described as the start of a strong advance. It gives indicator-formula and Python examples intended to identify the setup, including conditions based on recent price movement and a threshold relative to a rolling low. The narrative treats the trigger as evidence of buying support after a run of declines, but does not define it consistently across the examples.

The note provides no backtest, return data, or evidence that the pattern predicts a rally. It warns that a technical screen may ignore company fundamentals and that pursuing apparent breakouts can lead to chasing speculative moves. It recommends considering fundamental strength alongside technical conditions. Because the written definition and sample conditions do not fully align, the rule would need clarification and validation before use in research or trading.

Key ideas

• The screen combines moderate turnover with a run of consecutive down sessions and a proposed upward trigger.
• The examples use recent price and rolling-low conditions to represent the trigger.
• The document does not provide empirical evidence that the pattern predicts future gains.
• Its prose and sample rules do not define the setup consistently.
• Fundamental review and testing would be needed to assess the screen’s risks and usefulness.

Tags

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