Screening Chinese Equities for Profitable Small Caps and Low KDJ Readings

Summary

This document outlines a short-term stock screen for Chinese equities. It combines daily price amplitude above 1%, market capitalization below 10 billion yuan, positive earnings, and a low KDJ reading (K at or below 20) intended to identify stocks near a possible rebound. Its examples describe a formula-based screen and a Python-style workflow; the latter also filters for rising On-Balance Volume over 30 days. The text refers to recent quarterly profitability, while the example code’s profit filter does not clearly implement a four-quarter test.

The author cautions that a technical, short-horizon screen can overlook business fundamentals and that rebound likelihood is uncertain. Suggested improvements include combining multiple factors, adding fundamental checks, and balancing risk against potential return. No historical test, benchmark, or evidence of predictive performance is supplied, and the screening conditions alone do not establish that a rebound will occur. The material is best read as an illustrative screening recipe requiring independent validation.

Key ideas

• The screen combines price amplitude, a market-cap ceiling, positive earnings, and a low KDJ reading.
• The stated goal is to find possible short-term rebounds in smaller Chinese companies.
• An example workflow adds a filter for rising On-Balance Volume over 30 days.
• The document warns that technical screens may miss fundamental problems and that rebounds are uncertain.
• No backtest or performance evidence is provided, and the examples do not fully align on the earnings-period requirement.

Tags

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