Combining RSI, Seven Down Days, and Earnings Growth to Screen Chinese Stocks

Summary

The document proposes a stock screen that combines technical weakness with a fundamental growth condition. It selects stocks with RSI below 65, seven consecutive sessions in which the close is below the open, and year-over-year growth in net profit attributable to parent-company shareholders within the stated range of greater than 20% and up to 100%. The author frames this as a way to combine price behavior with company fundamentals.

The article also gives example formula and Python snippets, but the code has apparent inconsistencies with the stated screen: one condition skips stocks when all seven sessions meet the down-day test, and the formula shown does not clearly calculate the described profit-growth metric. It warns that liquidity, industry direction, balance-sheet condition, and macro factors are omitted. No historical returns or risk-adjusted results are reported, so the screen should be treated as a proposed filter requiring validation.

Key ideas

• The screen combines RSI below 65 with seven consecutive sessions where the close is below the open.
• It also requires net profit growth attributable to parent-company shareholders to exceed 20% and not exceed 100% year over year.
• The approach joins technical price conditions with a fundamental growth filter.
• The example code appears inconsistent with the stated seven-day rule and growth calculation.
• The document identifies liquidity, industry trends, balance sheets, and macro conditions as omitted risks.

Tags

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