RSI and Weekly Trend Filters for China Beverage and Alcohol Stocks

Summary

The document proposes screening equities in the beverage and alcohol import-export industry using a relative strength index (RSI) threshold and a weekly moving-average crossover. Its initial description uses a cross above the 30-week average, while its final version instead specifies a cross above the 60-week average with that average rising. It presents the RSI as a measure of price strength and the crossover as a sign of strengthening short- to medium-term trend.

The author warns that the screen uses few variables, does not deeply assess company fundamentals, and lacks a defined risk-control system or analysis of industry relationships. Suggested improvements include adding growth and valuation measures and explicit risk controls. No backtest, performance results, or evidence that the screen works are supplied, and the inconsistent moving-average horizons leave the final rule unclear. The accompanying indicator examples are illustrative rather than a complete, validated trading system.

Key ideas

• The proposed screen combines an RSI threshold with membership in the beverage and alcohol import-export industry.
• The document’s final rule uses a weekly crossover above a rising 60-week average, although its initial description specifies 30 weeks.
• The author suggests adding growth, valuation, and risk-control criteria.
• The screen lacks detailed fundamental analysis and consideration of relationships among industries.
• No backtest or performance evidence is provided.

Tags

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