Screening Small-Float Stocks by Turnover and a Sharp Daily Decline

Summary

The proposed stock screen looks for turnover between 3% and 12%, a circulating share count at or below 5.5 billion, and a daily maximum decline between 4% and 5%. The article frames the combination as a way to avoid very inactive stocks, limit exposure to extreme price swings, and identify stocks that may offer an opportunity after a short-term drop. Its final selection description additionally calls for positive recent earnings growth and quarterly sales growth above the industry average.

The document provides formulas for circulating market value, daily decline, and quarterly growth, but no candidate list, historical test, or evidence that a rebound follows the decline. It also acknowledges that a narrow screen can miss strong companies and future growth, and suggests considering valuation and growth alongside the technical conditions. The code examples do not establish a complete, validated trading process.

Key ideas

• The initial screen combines 3%–12% turnover, a circulating share limit, and a daily decline of 4%–5%.
• The final description adds recent earnings growth and quarterly sales growth above the industry average.
• The proposed rationale is to find a possible value opportunity after a sharp daily drop while maintaining some liquidity.
• The article gives calculation formulas but no backtest or evidence that screened stocks subsequently rebound.
• A narrow indicator-based screen may overlook company fundamentals and future growth potential.

Tags

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