Screening for Three Declines with RSI and Large-Order Flow

Summary

This proposed equity screen combines RSI below 65, a product of percentage price change and a large-order net-flow measure above 1, and a sequence of three declining sessions. The accompanying explanation says the RSI filter supplies technical context, the flow measure incorporates trading activity, and consecutive declines may help identify shares with downside volatility risk. The example Python outline also excludes ST-designated shares and includes additional filters for turnover, positive valuation readings, and a negative rolling return over three sessions. No indicator formulas are supplied, and the article does not report test results.

The strategy is explicitly framed around finding stocks with potential downside risk, not as a long-entry recommendation. Its own caveats include the possibility that technical signals omit fundamentals, the impact of incomplete or inaccurate data, and the chance that three declines fail to predict further losses. It suggests adding company fundamentals, competitive position, profitability, broader market conditions, and other technical measures. The screen therefore describes a hypothesis for further evaluation; it provides no evidence that the conditions reliably forecast declines.

Key ideas

• The proposed screen combines RSI below 65, a price-change and large-order-flow product above 1, and three consecutive declines.
• The article frames the selection goal as identifying downside volatility risk.
• The code example adds exclusions and filters beyond the stated core conditions.
• The document warns that data quality and technical signals can produce false indications.
• No backtest or predictive-performance evidence is provided.

Tags

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