Screening Equities with Volatility, Listing Age, and a Morning Star Pattern

Summary

This stock screen combines a daily price-movement threshold, a minimum listing age, and a three-session candlestick pattern described as a Morning Star. The stated rationale is to focus on active stocks with an established trading history and a possible reversal signal. The document also provides example indicator logic and Python-style selection steps, though the implementation details and pattern conditions are not fully consistent across the examples.

No backtest results, benchmark comparison, or evidence of predictive performance are presented. The article warns that a reversal pattern does not ensure a rise and that selecting active or popular shares can encourage chasing sharp moves. It suggests combining the pattern with other technical measures and fundamental checks. The screen is therefore best understood as a candidate-generation rule requiring careful definition, point-in-time data, and empirical testing before use; listing age and price amplitude alone do not establish stability or favorable risk-adjusted returns.

Key ideas

• The screen requires price amplitude above a threshold and more than a year since listing.
• It uses a three-session candlestick formation as a possible reversal signal.
• The document provides example formula and Python logic, but their pattern conditions are not fully aligned.
• No performance test or evidence of predictive value is reported.
• The article cautions that the pattern can fail and recommends evaluating additional technical and fundamental information.

Tags

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