Chinese Equity Screen Using RSI, Market Capitalization, and Return

Summary

The article proposes a stock selection screen combining three conditions: RSI below 65, a specified range for tradable market capitalization, and positive return. Its sample implementation calculates a 14-period RSI, filters stocks against the stated capitalization and return thresholds, then ranks qualifying names by return and selects up to five when enough candidates are available.

The stated rationale is to combine a technical condition with company size and recent price performance. The article warns that the screen omits company fundamentals, industry conditions, and macroeconomic changes, and that recent returns may reflect sentiment or flows rather than durable strength. It suggests adding valuation, industry outlook, macro context, and return persistence. No backtest results or evidence of predictive performance are provided, so the rules should be treated as a screening example rather than a validated strategy.

Key ideas

• The screen requires RSI below 65, tradable market capitalization within the stated band, and positive return.
• The example uses a 14-period RSI and ranks qualifying stocks by return.
• The article identifies omitted fundamentals, industry context, and macroeconomic conditions as limitations.
• Recent positive return may not persist, and the article provides no backtest evidence.

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