Equity Selection Using Daily Range, Reversal Patterns, and Large-Order Flows

Summary

This stock screen combines a daily high-to-low range threshold, a reversal or engulfing-style pattern, and a ranking based on large-order net volume relative to market capitalization. The accompanying formula ranks that flow measure and keeps the top-ranked candidates. The article also recommends examining fundamentals and monitoring whether capital flows persist over different horizons.

The article gives formula and Python examples, but they do not align fully with its stated screen: the Python adds a fixed-price condition and candlestick-pattern checks, while the formula describes a different reversal test. No backtest, returns, or risk-adjusted evidence is reported. The author cautions that relying mainly on technical signals and flow can overlook company fundamentals, financial conditions, and the broader market environment; the screen is presented as a starting point for further analysis.

Key ideas

• The screen combines a daily price-range condition with a reversal signal and large-order net-flow ranking.
• The formula ranks large-order net volume relative to capitalization and selects highly ranked stocks.
• The code examples include conditions that differ from the screen as described in prose.
• The article reports no performance test and warns that technical and flow signals omit fundamental and market context.
• It suggests adding fundamental analysis and tracking changes in flows over time.

Tags

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