Chinese Stock Screen Using Reversal Candles and Low KDJ

Summary

This article describes a Chinese stock screening rule that combines daily price range, a recent reversal-style candlestick condition, and a low KDJ value. Its stated final criteria are amplitude above 1%, a reversal pattern within the past three days, and K below 20. It also provides example formulas and Python-style logic for calculating the filters and returning candidate stocks.

The article cautions that the screen relies heavily on technical signals and does not account for company fundamentals or industry context. It suggests adding other indicators, such as MACD or Bollinger Bands, and considering risk management and fundamentals. No backtest results, performance statistics, or evidence that the filters produce stable returns are presented. The code examples also use differing constructions for amplitude and reversal, so implementation details may need verification before use.

Key ideas

• The screen combines price amplitude, a recent reversal pattern, and a KDJ K value below 20.
• The article specifies that the reversal condition should occur within the previous three days.
• The provided examples illustrate indicator-based filtering but do not report tested performance.
• The author notes that technical-only screening omits fundamental and industry information.
• Additional indicators and risk considerations are suggested as possible refinements.

Tags

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