Equity Screening with RSI, Revenue Growth, and Positive Earnings

Summary

The strategy selects equities with an RSI below 65, 2021 revenue greater than 2018 revenue by a ratio above 1.1, and positive net profit in the first quarter of 2021. It then proposes taking the first N qualifying stocks and holding them for one year. The combination pairs a technical condition intended to avoid high RSI readings with historical revenue growth and a recent profitability requirement. The document also gives illustrative indicator formulas and sample code, though the code's data handling and profit-field choices are not fully aligned with the stated screening criteria.

The author cautions that historical company and market data cannot predict future conditions and that a few filters may exclude promising candidates. Possible additions include valuation and share-price measures or machine-learning methods, but no specific method is evaluated. No backtest results, benchmark comparison, portfolio weighting, or detailed rebalancing and exit rules are reported. Because the financial inputs are tied to past periods, any implementation would also need to account for reporting dates and avoid using information before it became available.

Key ideas

• The proposed screen combines RSI below 65, revenue growth between 2018 and 2021, and positive first-quarter 2021 net profit.
• The strategy suggests selecting the first N qualifying stocks and holding them for one year.
• It combines a technical indicator with historical growth and profitability measures.
• The document acknowledges that historical data may not predict future company or market conditions.
• No backtest results, benchmark, portfolio weights, or complete rebalancing rules are given.

Tags

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