Combining RSI, Large-Order Flow, and Morning Star Signals for Stock Screening

Summary

This stock-screening idea combines a relative strength index threshold below 65 with a signal based on the product of percentage price change and net volume from very large orders. It also requires a named Morning Star pattern, using technical, order-flow, and candlestick information together. The document suggests that the pattern may indicate a short-term reversal and treats large-order flow as a gauge of market interest.

It gives example indicator names and a brief Python-style filter, but no backtest, performance evidence, or detailed definitions for the flow variable or pattern calculation. The author notes that technical and chart signals may miss fundamental risks and that institutional flows can distort selections. Suggested extensions include other candlestick patterns, fundamental measures, diversification, and dynamic allocation; these are proposals rather than tested improvements.

Key ideas

• The screen requires RSI below 65, a positive product of price change and large-order net flow, and a Morning Star signal.
• It combines technical indicators, order-flow data, and candlestick patterns.
• The Morning Star condition is presented as a possible short-term reversal signal.
• The document provides no empirical performance results and cautions that technical signals can omit fundamental risks.

Tags

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