Combining Range, Prior Turnover, and Morning Star Pattern Filters

Summary

This Chinese equity screen combines three short-term technical conditions: daily price amplitude above 1, prior-day actual turnover between 3% and 28%, and a positive Morning Star candlestick signal. It presents amplitude and turnover as measures of price movement and trading activity, with the candlestick pattern serving as a possible reversal cue. Formula and Python examples illustrate the intended filters, though the turnover calculation shown uses volume ratios and may not match actual turnover as described.

The note says the combination may help gauge short-term direction, but offers no backtest or performance evidence. It cautions that the method relies on a narrow set of technical features, omits other drivers of stock prices, and that the Morning Star pattern may not work consistently across stocks. It suggests including company financials, industry trends, and additional indicators, without showing that these changes improve results. The screen is best understood as a candidate-selection rule requiring independent validation.

Key ideas

• The screen requires amplitude above 1 and prior-day actual turnover from 3% to 28%.
• It also requires a positive Morning Star candlestick signal.
• The examples illustrate the filters, though their volume-ratio calculation may not represent actual turnover.
• The document warns that the technical-only screen omits fundamental and other market factors.
• No performance data is given, and the pattern’s usefulness may vary across stocks.

Tags

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