Screening Profitable Mid-Cap Stocks with RSI and Market Value

Summary

This Chinese equity screen combines a relative strength index threshold with a circulating-market-value range and positive net profit. The stated aim is to find profitable companies in a middle market-capitalization band while avoiding stocks whose RSI exceeds the specified level. Its example calculates RSI over 14 periods and, when enough candidates qualify, ranks them by percentage price change and returns a fixed-size shortlist.

The article gives a Python example but no backtest or evidence of returns. It acknowledges that RSI and market capitalization alone do not provide a complete view of company quality, balance-sheet risk, cash flow, or valuation. The screen’s wording also contains some ambiguity about a separate upper market-value limit alongside the stated range. The suggested improvement is to combine the technical filter with broader financial measures and further analysis before treating selections as investment candidates.

Key ideas

• The screen combines an RSI threshold with a circulating-market-value band and positive net profit.
• The example calculates RSI over 14 periods and ranks qualifying stocks by recent percentage change.
• It produces a shortlist only when at least five candidates meet the conditions.
• The post provides no backtest or evidence that the screen is profitable.
• It recommends adding measures of leverage, earnings, cash flow, and other fundamentals.

Tags

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