Screening for a Three-Day Pullback and Bullish Reversal

Summary

This stock screen looks for names with turnover in a specified range, three consecutive declining sessions, a following close above the prior three day highs, and two consecutive positive sessions. It combines a liquidity filter with a pullback pattern and a breakout style reversal condition. The article describes the setup as a technical filter for potential investment candidates, but provides no performance data or examples of selected stocks.

The source includes indicator logic and a Python example using historical daily prices. The implementations do not align perfectly with the written rule: the code’s comparisons and lookback calculations may represent different conditions, and the Python sample uses a close-to-close return proxy where the description specifies turnover. The article acknowledges that the screen excludes fundamentals and ignores other market influences, and suggests adding valuation or dividend measures. Its effectiveness remains unverified in the material provided.

Key ideas

• The screen combines a turnover band with a three session decline and subsequent bullish price reversal conditions.
• The intended reversal confirmation includes a close above the preceding three session highs and consecutive positive sessions.
• The article supplies code examples but no backtest evidence or measured outcomes.
• The sample implementations appear inconsistent with parts of the written rule and require validation.
• Fundamentals and broader market conditions are absent from the proposed screen.

Tags

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