Chinese Stock Sell Screen Using Seven Declines and Turnover

Summary

This Chinese equity screening rule flags stocks for selling when amplitude exceeds 1, the prior day’s actual turnover rate is between 3% and 28%, and closing prices have fallen for seven consecutive trading days. It combines a volatility condition, a turnover filter, and a short-term downward price sequence. The article provides example formulas and Python-like screening logic, but those illustrations may not implement the stated rule consistently; for example, the turnover calculation is described as a volume ratio in the code.

The source explicitly warns that repeated declines do not establish that prices will keep falling, and that a selected stock may rebound from a low. It also notes that uncertain timing and market sentiment can undermine decisions. Suggestions include weighting the length of the decline and adding company, industry, and ownership information. No backtest results or performance measures are reported, so the rule is a screening proposal rather than validated sell timing evidence.

Key ideas

• The proposed sell screen combines amplitude above 1 with prior-day turnover between 3% and 28%.
• It selects stocks whose closes declined for seven consecutive trading days.
• A continuing decline is not assured, and a selected stock may rebound.
• The sample code may not match the turnover definition in the stated rule.
• The article proposes adding broader factors but provides no backtest evidence.

Tags

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