Equity Screening with RSI, Market Capitalization, and Positive P/E

Summary

This article proposes a stock screen combining a technical condition with valuation and size filters. It selects equities with an RSI below a stated threshold, positive trailing price-to-earnings ratio, and free-float market capitalization within a specified range. Its example implementation calculates RSI, applies the filters, sorts eligible stocks by P/E, and selects up to five names, subject to an additional daily price-change condition. The text also suggests considering measures such as profitability and earnings growth, or hedging with stocks of similar style.

The article provides no backtest, benchmark comparison, or evidence that the screen produces superior returns. It cautions that the rule uses only a few variables, omits broader company and industry factors, and treats P/E as an incomplete measure of valuation. The code includes implementation details that may affect the selected set, but no trading exits, position sizing, or portfolio risk framework is evaluated. The proposal is best read as a basic screening example, not a validated investment strategy.

Key ideas

• The screen requires RSI below a threshold, positive trailing P/E, and free-float market capitalization within a stated band.
• Eligible stocks are ranked by P/E, with a price-change condition applied before selection.
• The article proposes adding profitability and earnings-growth measures to broaden the fundamental assessment.
• The document gives screening logic but no backtest or evidence of predictive performance.
• The stated filters omit industry context and other risks, and P/E alone cannot establish fair value.

Tags

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