Chinese Stock Screen for Arc-Shaped Price Action and Trend Starts
Summary
This Chinese stock-selection example combines a minimum daily price range with price action near short and medium moving averages, a recent high-price condition, and a regression-based measure involving the spread between short and longer moving averages. It also requires recent average trading volume to exceed a longer-window average. The stated aim is to find active stocks with relatively contained fluctuations that may be beginning an upward move.
The document explains the conditions qualitatively and supplies indicator-formula and Python examples, but it reports no backtest, returns, or empirical validation. Its own caveats are that the screen uses few conditions and ignores company fundamentals, which can admit weak businesses or otherwise risky stocks. It suggests adding indicators and fundamental filters, though these additions would need testing. The implementation details also warrant review before use: the prose, formula, and sample code do not always express the same condition consistently, and the sample data handling is unclear.
Key ideas
- The screen combines daily range, moving-average proximity, and recent price-high conditions.
- A volume filter requires recent average volume to exceed a longer-period average.
- A regression term based on moving-average spread is used to identify a possible trend start.
- The document provides no performance evidence for the selection rules.
- It warns that technical-only screening may select poor-quality stocks and suggests broader analysis.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.