Screening Chinese Stocks with RSI, Order-Book Volume, and Morning Star
Summary
The document describes a Chinese equity screening rule that combines three conditions: RSI below 65, bid-side volume greater than ask-side volume, and a bullish Morning Star candlestick pattern. It frames RSI as a measure of price conditions, the volume comparison as a sign of buying interest, and the pattern as a possible reversal after a decline. The article also includes formula and Python examples for implementing the screen, with an additional market-cap filter in the Python example.
No backtest results, trade outcomes, or evidence of predictive accuracy are reported. The document cautions that the screen relies on technical indicators and market sentiment while omitting company fundamentals and financial data; it also notes that a single-indicator approach can select poor-quality stocks. The Morning Star condition and the RSI threshold are screening rules, not proof that a reversal will follow. The text recommends considering broader company, industry, and risk factors when evaluating candidates.
Key ideas
- The screen requires RSI below 65, stronger bid-side than ask-side volume, and a bullish Morning Star pattern.
- The pattern is presented as a possible reversal signal after a price decline.
- The Python example includes a market-cap filter in addition to the core conditions.
- The article reports no backtest or performance evidence.
- It warns that the technical screen omits fundamentals and requires risk-aware evaluation.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.