Chinese Stock Screening with Moving Averages and RSI

Summary

This stock selection method combines three technical conditions: a 14-period RSI below 65, the current close above its one-day moving average, and the 20-day moving average above the 120-day moving average. The moving-average comparisons aim to select stocks with upward price direction while the RSI threshold filters out some highly extended candidates. The article also describes ranking qualifying stocks by trading volume and keeping a limited number of names.

The accompanying example uses historical price data and technical indicator calculations, but gives no backtest results or evidence that the screen produces excess returns. The article identifies a key limitation: it ignores company fundamentals and macroeconomic conditions, and suggests incorporating profitability and valuation measures. The published sample uses a single historical date and an implementation whose data and API choices may need updating, so its output should not be treated as a validated or ready-to-trade strategy.

Key ideas

• The screen requires RSI to remain below 65.
• It selects stocks whose close is above the one-day moving average and whose 20-day average exceeds the 120-day average.
• Qualifying stocks are ranked by trading volume, with only a small number retained.
• The article provides no performance test and notes that fundamentals and macroeconomic conditions are omitted.

Tags

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