RSI, Trading Imbalance, and Moving Averages for Stock Screening

Summary

The proposed stock screen combines an RSI range, a ratio of outside to inside trading volume above a stated threshold, and a 20-day moving average above a 120-day average. The article frames these conditions as a mix of market sentiment, trading-flow direction, and trend confirmation. It includes a screening formula and Python example, while also suggesting that fundamental measures and additional technical signals could be considered.

The article warns that the approach omits fundamentals, may be noisy in volatile stocks, and relies heavily on technical and flow measures. It recommends considering market conditions and risk controls. The code’s data fields and timing assumptions are not explained, and its rolling-average check appears to apply the condition across the available history rather than only to the latest observation. No backtest or performance evidence is given, so the screen remains an unvalidated selection heuristic.

Key ideas

• The screen requires RSI below an upper bound, outside-to-inside volume above a threshold, and the 20-day average above the 120-day average.
• The conditions combine a momentum oscillator, a trading-flow ratio, and a trend filter.
• The article identifies missing fundamental analysis and sensitivity to short-term noise as risks.
• The example code and timing assumptions need scrutiny, and no backtest results are provided.

Tags

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