Screening for Seven-Day Declines, Turnover, and a Reversal Pattern

Summary

This Chinese A-share screening proposal combines turnover between 3% and 12%, seven consecutive down days, a preceding seven-day gain above 2%, and a reversal or engulfing condition. Its stated aim is to find short-term candidates after a run-up and a sustained pullback. The article also provides formula and Python examples, though their conditions do not consistently match the prose: the formula adds a decline threshold, while the Python implementation uses different price comparisons.

The author describes the approach as a way to create short-term opportunities, but gives no backtest results or performance evidence. The screen can sharply narrow the candidate pool, relies heavily on a small set of recent price observations, and may misread continued weakness as a reversal. The article suggests combining it with other technical, sector, or financial filters and adjusting the reversal rule to market conditions.

Key ideas

• The screen combines a specified turnover band with seven consecutive declining sessions.
• It also requires a prior gain and a reversal condition, although the examples implement these inconsistently.
• The proposal is intended for short-term stock selection and provides no performance evidence.
• A prolonged decline can continue, so the reversal signal may produce false entries.
• Additional technical, sector, or financial filters could broaden the analysis.

Tags

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