Screening Profitable Small-Cap Stocks by Price Range and Shape

Summary

This document outlines an equity screen combining a daily price-range condition, a market-capitalization ceiling, positive profits, and a price pattern described as a rounded arc. Its proposed version requires a range above 1%, capitalization below 10 billion, and positive net income in each of the latest four quarters. It also suggests adding technical, fundamental, industry, and market-interest measures, then limiting position sizes and using stop losses.

The document provides example formulas, but they do not fully align with the written rules: the formula’s profit and capitalization fields may not implement the stated quarterly and currency conditions, and the Python example leaves some filters unfinished. No backtest, performance results, or precise definition of the rounded-arc pattern is supplied. The screen is therefore a rough selection concept, not evidence of a validated strategy; its subjective pattern parameters and omission of smaller or weaker stocks are noted limitations.

Key ideas

• The screen combines price range, market capitalization, profitability, and a rounded price pattern.
• The proposed criteria include positive net income across the latest four quarters.
• The document recommends combining technical and fundamental measures with industry and market context.
• It advises limiting single-stock exposure and using stop losses.
• The examples leave key conditions underspecified and provide no performance evidence.

Tags

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