Combining RSI, Three Down Days, and Valuation Filters for Shenzhen Stocks

Summary

This note describes a Chinese equity screening rule that combines a 14-period RSI below 65 with three consecutive down sessions and valuation limits for Shenzhen main-board stocks. The stated filters cap trailing price-to-earnings at 29.01 and price-to-book at 3.11. It presents the conditions as a way to combine technical signals with basic valuation checks, and includes formula and Python examples illustrating how to apply them to stock data.

The article cautions that valuation ratios alone cannot predict future company performance and may become extreme or misleading. It offers no performance results, backtest, or evidence that the combined screen selects higher-quality stocks or controls risk effectively. It suggests adding measures such as leverage, growth, and industry context, then refining the model with data analysis. The examples also leave practical questions—such as portfolio construction, trading rules, and how to handle data timing—unanswered, so the screen is best read as a starting hypothesis rather than a validated strategy.

Key ideas

• The screen combines RSI below 65 with three consecutive down sessions.
• It restricts eligible Shenzhen main-board stocks by stated price-to-earnings and price-to-book ranges.
• The article frames technical and valuation filters as complementary selection criteria.
• Valuation ratios can be misleading and do not reliably forecast future results on their own.
• The document provides no backtest or evidence of investment performance.

Tags

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