Screening for Small-Float Stocks After Three Consecutive Declines

Summary

This Chinese equity screen combines three conditions: amplitude above one percent, freely tradable shares of no more than 5.5 billion, and three consecutive declining closes. The article interprets high amplitude as a way to find more active stocks, the float limit as a small-cap filter, and the decline sequence as a possible sign of weak sentiment that could precede a rebound. It provides example indicator and Python logic for intersecting the filters.

The proposed rebound interpretation is not supported by a backtest or other empirical evidence in the document. The article cautions that three declining sessions describe only short-term price action and can obscure longer-term trends or company fundamentals. It recommends using a longer assessment period and combining the screen with financial and operating information. The example should be treated as a basic selection rule; its data timing and implementation would need review before research or trading use.

Key ideas

• The screen combines amplitude above one percent, a float ceiling of 5.5 billion shares, and three declining closes.
• The article suggests the decline sequence may identify stocks with rebound potential.
• It warns that short-term price patterns can miss long-term trends and fundamental weakness.
• It recommends broader time horizons and company analysis.
• The document provides no performance test for the screen.

Tags

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