A Volatility and Price-Strength Screen With Morning-Star Confirmation

Summary

The post proposes a stock screen combining a large daily trading range, a recent session with a gain of at least ten percent, and a morning-star reversal pattern for a named stock. Its later formulation adds a close above the prior session’s high-low range, plus placeholders for fundamental and combined technical and sentiment measures. Example formulas describe range relative to ATR, a daily return threshold, and a prior-bar price comparison, then rank candidates by a heat measure.

The author acknowledges that a short-term, price-driven screen can overlook fundamentals and longer-term trends, react excessively to market sentiment, and produce a narrow candidate pool. Suggested refinements include adding company and industry information and revisiting the thresholds. However, the proposed additions are left unspecified, and the examples do not fully implement the original multi-day condition or the morning-star pattern. No historical performance, risk statistics, or validated results are supplied, so the post presents an incomplete screening idea rather than evidence of a profitable strategy.

Key ideas

• The proposed screen combines price range, recent strong gains, and reversal-style price behavior.
• The examples use ATR, a one-session return threshold, and a comparison with the prior session’s range.
• The author warns that short-term price screens can neglect fundamentals and longer-term trends.
• Fundamental, technical, and sentiment filters are suggested but not fully defined.
• The post provides no backtest evidence, and its example formulas do not implement every stated condition.

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