Screening Chinese Stocks with Market Size, Amplitude, and Morning Star Signals

Summary

The document presents a Chinese-equity screening rule that combines a minimum daily amplitude, a circulating-market-cap threshold, and a morning star candlestick signal. It describes the pattern as a possible bullish reversal after a decline and provides corresponding formula and Python examples. The stated rationale is to combine price movement, company size, and a technical pattern when selecting stocks.

The article acknowledges that a single candlestick signal can be misleading and suggests adding measures such as RSI or moving averages, as well as studying the pattern’s behavior. It supplies no backtest results or evidence that the screen predicts returns. The sample code also leaves data and calculation details unclear: its amplitude expression and market-cap field units may not implement the stated thresholds consistently, and the cited TA-Lib pattern function is not necessarily equivalent to the named platform-specific pattern. The rule should therefore be treated as an illustrative screen requiring verification and testing.

Key ideas

• The proposed screen combines daily amplitude, circulating market capitalization, and a morning star candlestick pattern.
• The pattern is presented as a potential reversal signal near the end of a decline.
• The article identifies false signals and reliance on one indicator as risks.
• It suggests adding other indicators and studying the pattern, but provides no performance evaluation.

Tags

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