Screening Chinese Stocks with Activity Filters and a Morning Star Pattern

Summary

This proposed A-share stock screen combines a daily range threshold with a measure based on the prior day’s turnover and the ratio of current auction volume to prior volume. It also requires a three-candle reversal pattern described as a morning star, whose middle candle has a relatively small body. The article presents this as a way to find stocks that may be turning upward.

The document supplies indicator formula and Python examples, but they do not consistently match the stated rules: the Python uses an evening-star detector, and its volume calculations differ from the described auction-volume ratio. No historical performance test or supporting evidence is reported. The author cautions that candlestick patterns are not reliable in every market and that a technical-only screen omits company and industry fundamentals. The suggested additions are fundamental data and adjustments for market segment characteristics.

Key ideas

• The screen combines price range, turnover and auction-volume activity, and a three-candle reversal pattern.
• The stated pattern is a morning star, but the Python example calls an evening-star detector.
• The article reports no backtest results to establish the screen’s predictive value.
• Market conditions and omitted fundamental information may limit the approach.

Tags

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