Equity Momentum Screen Using RSI, Daily Gains, and Recent Price Spikes

Summary

This post proposes a main-board stock screen that selects shares with RSI below 65, a current-day gain above 1%, and at least one session gaining 10% or more during the prior 25 trading days. The intended rationale combines a moderate RSI reading with positive daily momentum and evidence of a recent sharp rise, seeking stocks that may continue upward. The post includes a formula for counting large daily gains across the lookback window and an illustrative Python-based selection sketch.

The article warns that a recent large gain may identify an overvalued stock and may not represent the broader trend or future direction. It recommends combining the screen with other technical or fundamental measures and allowing more flexibility in selection. No backtest, return series, or risk-adjusted evidence is provided. Its explanation also treats RSI below 65 as oversold, but that interpretation is not established by evidence in the post. The screen is therefore a hypothesis for further testing, not a demonstrated low-risk strategy.

Key ideas

• The screen requires RSI below 65, a current-day gain above 1%, main-board listing, and a recent 10% gain day.
• A 25-session lookback is used to detect at least one large daily price move.
• The author notes that a past price spike can coincide with relative overvaluation and may not indicate a lasting trend.
• The post provides illustrative selection logic but no backtest or evidence that the strategy is low risk.

Tags

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