Screening for High-Amplitude Stocks After Seven Down Sessions
Summary
The document describes an equity screen combining daily amplitude above 1, RSI below 65, and seven consecutive declining sessions. It presents the conditions as a way to find volatile, weak stocks that might rebound, then suggests ranking selected stocks by relative strength and keeping the strongest portion. It also gives a formula for identifying the consecutive bearish sessions and sketches amplitude and RSI calculations.
The screen is a technical filter, not evidence of a profitable strategy: no backtest results or evaluation period are provided. The document warns that a long losing streak does not establish fundamental value or predict a reversal, and that the filter may exclude stronger stocks or companies with sound fundamentals experiencing temporary pullbacks. It recommends considering broad market conditions and company fundamentals, and mentions valuation, growth, volume, and directional indicators as possible additions. The code references differing definitions of declining sessions, so implementation details should be checked before use.
Key ideas
- The screen combines amplitude above 1, RSI below 65, and seven consecutive down sessions.
- The proposed rationale is to identify weak, volatile stocks that may be candidates for a rebound.
- A relative-strength ranking is suggested to prioritize stocks that remain comparatively strong.
- A consecutive losing streak alone does not establish value or forecast a reversal.
- Fundamental data and market conditions may help address the screen’s blind spots.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.