Screening Profitable Chinese Small-Cap Stocks with RSI and Valuation Filters

Summary

This A-share screening approach combines a 14-period RSI threshold below 65 with company and size filters. It excludes recently listed firms, requires positive profitability, and restricts market capitalization to between 1 and 100 billion yuan. The final stated rule also caps price-to-earnings and price-to-book ratios at 30 and 3, respectively. The note includes illustrative indicator and data-processing logic for applying these conditions.

The article presents no backtest or evidence of realized performance. It acknowledges that the RSI cutoff is subjective and that a firm can remain profitable while growing slowly, so the criteria may miss attractive smaller companies. It suggests broadening the assessment with additional valuation, relative-strength, and money-flow measures. The screen is therefore a stock-selection heuristic; data definitions, reporting periods, and implementation details would need careful review before use.

Key ideas

• The screen combines an RSI threshold with listing-age, profitability, and market-capitalization requirements.
• The stated final rule adds price-to-earnings and price-to-book ceilings.
• The document provides sample screening logic but no performance evaluation.
• A subjective RSI threshold and limited fundamentals can produce misleading or incomplete selections.

Tags

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