Screening Main Board Stocks with RSI, Daily Gains, and ROE

Summary

This stock-selection proposal combines a technical filter with a profitability screen: choose main board stocks with RSI below 65, a daily gain above 1%, and return on equity above 15% in each of the previous five years. The author presents RSI as a way to avoid an overbought reading, the positive daily move as a sign of near-term momentum, and sustained ROE as a marker of company quality. The post includes example formula and Python snippets, although its code description also mentions a recent large daily rise condition that is absent from the stated final selection rules.

The document reports no performance analysis or backtest evidence, and its rationale contains an interpretive error: RSI below 65 alone does not establish that a stock is oversold. It also acknowledges that ROE is an incomplete measure and that a strict history requirement could exclude growing firms. The proposal is therefore best read as an illustrative screen, not a validated investment strategy; it suggests adding valuation measures such as price-to-earnings or price-to-book ratios.

Key ideas

• The proposed screen requires RSI below 65, a daily gain above 1%, main board listing, and five consecutive years of ROE above 15%.
• The author combines technical conditions with a historical profitability criterion.
• The document provides example formulas and code but reports no backtest results.
• ROE alone may not capture overall business performance, and strict profitability requirements can omit younger growth companies.
• The text recommends considering additional valuation measures when assessing candidates.

Tags

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