Screening for Price Range, Limit-Up History, and Morning-Star Reversals

Summary

This equity screen combines a daily price-range filter, at least two limit-up sessions during a 500-day lookback, and a three-candle morning-star reversal pattern. The pattern is described as a long bearish candle, a small-bodied middle candle, and a bullish third candle that closes above the preceding two sessions. The article presents these conditions as a way to find active stocks with a possible reversal signal and includes formula and Python-style examples.

No historical results or evidence establish that this combination predicts profitable trades. The article cautions that the screen emphasizes recent price behavior, may miss fundamental information, and can generate false technical signals; it also says the reversal rule needs validation. The sample code and formulas are references rather than a complete research process, and the pattern criteria may require precise definitions before implementation. A trader would need to test the rules against suitable data, account for market-specific limit rules and execution, and compare results with simpler baselines.

Key ideas

• The screen combines daily price range, a 500-day limit-up count, and a morning-star reversal pattern.
• The described candlestick sequence moves from a long bearish candle through a small-bodied candle to a stronger bullish close.
• The article provides example formulas and code but reports no strategy performance evidence.
• Technical signals may produce false positives and do not account for long-term fundamentals.
• The pattern rules and market-specific limit-up definitions require validation before use.

Tags

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