Equity Screen for a Sharp Decline Above the 250-Day Moving Average

Summary

This Chinese equity screening rule selects stocks whose daily amplitude exceeds a stated threshold, whose intraday low falls within a narrow band of roughly four to five percent below the prior close, and whose previous close is above the 250-day moving average. The post presents the conditions as a way to combine current price action with a longer-term trend filter. It also gives an example implementation and a moving-average reference, although the code's decline check does not precisely encode the full stated band.

The author notes that the rule relies on a small number of technical and historical price conditions. A change in market behavior or a stock's past trend can make the selection less useful, and the screen does not capture broader market complexity. Proposed additions include momentum indicators and fundamental measures such as valuation. The document reports no backtest, return series, or other performance evidence, so it does not establish that the screen is profitable.

Key ideas

• The screen requires daily amplitude above a threshold and a daily low about four to five percent below the prior close.
• It also requires the previous closing price to exceed the 250-day moving average.
• The rule combines a short-term price decline with a longer-term trend condition.
• The sample code may not exactly represent the full stated decline band.
• The post suggests adding technical and fundamental factors but provides no performance evidence.

Tags

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