Screening Equities by RSI, Profit Growth, and Revenue Growth
Summary
The document describes a Chinese equity screen combining a 14-period RSI below 65 with year-over-year growth in net profit attributable to the parent company above 20% and at most 100%. It also requires revenue in 2021 to exceed revenue in 2018 by more than 10%. The rationale is to combine a technical condition with recent profitability growth and a longer-term revenue trend.
The article provides example implementations and discusses possible refinements, such as adding valuation, other technical indicators, or company size criteria. It does not report a backtest, returns, or evidence that the screen predicts gains. The discussion cautions that historical profit and revenue growth may not persist, and a small number of filters can produce false positives or exclude suitable stocks. The supplied examples also use particular data fields and calendar periods, so their calculations and results may depend on data availability and implementation details.
Key ideas
- The screen requires RSI below 65 and net profit growth above 20% but no more than 100%.
- It compares 2021 revenue with 2018 revenue and requires a ratio above 1.1.
- The approach combines a technical indicator with profitability and revenue growth filters.
- Past company growth may not indicate future performance, and the article provides no performance test.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.