Screening Low-Priced Stocks with RSI and Three Bearish Sessions
Summary
This equity selection rule combines an RSI below 65, three consecutive bearish sessions, and a share price below 12. The document presents it as a way to focus on low-priced stocks while using a momentum indicator and recent candle direction to describe market conditions. It includes formula and Python examples, but reports no backtest, benchmark, or other performance evidence.
The author warns that the screen omits company finances and industry conditions, which may leave it exposed to low-quality businesses or stocks whose low prices persist. Suggested refinements include adding valuation measures, industry filters, and other technical indicators. The document does not define a complete trading system: it gives no entry timing beyond the screening conditions, exit rules, position sizing, or risk controls. Its signal logic also warrants checking against the intended meaning of three bearish sessions, since the examples compare prior closes with prior opens.
Key ideas
- The selection rule requires RSI below 65, three bearish sessions, and a share price below 12.\nThe rule uses recent price direction and RSI alongside a low share-price filter.\nThe document supplies example implementations but does not provide performance results.\nIt cautions that price and technical filters do not assess company quality or industry context.\nValuation, industry, and additional technical conditions are proposed as possible refinements.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.