Combining RSI, Candle Patterns, and Institutional Buying Signals

Summary

The document presents a Chinese equity screening idea that combines a 14-period RSI below 65, a multi-candle price pattern, and indicators intended to represent institutional buying. Its stated concept is to use a technical filter alongside research or money-flow data to find stocks that may be attracting institutional interest. The examples describe thresholds for institutional research activity, a turnover-based ratio, and a five-period average of institutional buying volume.

There is an important inconsistency: the prose calls for three consecutive down sessions, while the supplied formulas check that each of the prior three candles closed above its open and that the current candle also closed above its open. The document provides no backtest results or evidence that the screen predicts returns. It also acknowledges that technical signals and institutional data can be inaccurate or delayed, that market sentiment and capital flows can affect selections, and that the screen omits broader fundamentals. Suggested additions include volume, earnings growth, and time-series analysis of institutional data.

Key ideas

• The proposed screen combines a 14-period RSI threshold with a multi-candle pattern and institutional activity measures.
• The text describes three consecutive down sessions, but its example formula checks for bullish candles across the prior three sessions and the current session.
• Institutional interest is approximated with research activity, a turnover-based ratio, and average buying volume.
• The document reports no performance tests, and it cautions that signals may be inaccurate, delayed, or affected by market flows.
• The author suggests adding volume, earnings growth, and time-series analysis to refine the screen.

Tags

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