Screening Chinese Stocks with a Morning Star and Volatility Filters

Summary

This community post proposes a short-term stock screen combining a price-range condition, a morning-star candlestick pattern, and a rule excluding stocks that closed at their daily price limit on the prior session. The stated rationale is to combine volatility, a potential reversal pattern, and a filter on the previous day’s market behavior. It also suggests incorporating industry and company fundamentals to assess candidates more broadly.

The post includes example indicator logic and Python-style code that checks moving averages, MACD, candle relationships, price limits, and recent daily data. However, the description is not a fully specified or validated strategy: the named selection criteria and the supplied formulas do not map cleanly to one another, and no backtest results, benchmark comparison, or transaction-cost analysis are provided. The post itself notes that technical and sentiment-based rules omit fundamentals and can be exposed to extreme market conditions. Treat it as a sketch of screening ideas rather than evidence of a profitable trading system.

Key ideas

• The proposed screen combines a volatility condition, a morning-star pattern, and a prior-session price-limit exclusion.
• The example logic uses moving-average alignment, MACD values, candle relationships, and price-limit data.
• The post recommends adding industry and company fundamentals to broaden candidate evaluation.
• No backtest evidence is provided, and the stated screen and example formulas are not fully aligned.

Tags

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