Equity Screening with Reversal Patterns, Positive Earnings, and Small Capitalization

Summary

This screen combines turnover between 3% and 12%, a reversal-style price pattern, market capitalization below 10 billion, and positive net profit. Its accompanying formula reference expresses the reversal condition through a three-day reversal metric, while the example code sketches calculations based on the prior close and the day’s high and low. The article presents profitability and market size as fundamental filters alongside the price-pattern and turnover conditions.

The discussion recommends considering additional technical indicators and adjusting the screen to changing market conditions. It cautions that the selection omits factors such as share structure and asset quality, so stocks passing the filters may still vary substantially in quality and risk. The code is illustrative rather than a validated implementation, and the article gives no backtest, trading rules, or performance evidence. It therefore describes a candidate screening recipe, not evidence that the combination reliably identifies attractive investments.

Key ideas

• The screen combines turnover of 3% to 12%, a reversal-style signal, market capitalization below 10 billion, and positive net profit.
• The reversal example uses a three-day metric derived from daily price data.
• The article recommends combining technical signals with fundamental information and adapting to market conditions.
• Share structure and asset quality remain outside the stated filters.
• No backtest or measured performance is provided.

Tags

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