Screening Chinese Stocks by RSI, Moving Averages, Market Value, and Profitability

Summary

This Chinese equity screening idea combines a relative strength index below 65, upward-diverging moving averages, market capitalization below 10 billion yuan, and nonnegative earnings. The post presents the screen as a way to find smaller companies with sound reported profitability and prices showing upward momentum, then suggests allocating capital equally across selected stocks.

The accompanying example code narrows the universe and references a 14-period RSI and moving averages, but its implementation details do not fully establish the stated upward-divergence condition. The post gives no backtest, performance data, or comparison with a benchmark. It warns that the screen may select speculative stocks and that an appropriate size threshold can vary by industry and market conditions; it suggests adding valuation measures such as price to earnings or price to book.

Key ideas

• The screen combines RSI below 65, upward moving-average behavior, a market-value ceiling, and nonnegative earnings.
• The proposed portfolio equally weights the selected stocks.
• The example references a 14-period RSI and moving averages, but does not fully define every screening condition.
• The post provides no performance evidence and cautions that small-cap screens may capture speculative stocks.
• Industry differences and additional valuation measures may affect how useful the screen is.

Tags

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