Screening Stocks by Amplitude, Volume Ratio, Market Cap, and Profitability

Summary

This stock screen selects shares with relatively high daily price amplitude and a volume ratio within a specified band, then applies a small-capitalization limit and a profitability condition. The article first describes companies without losses, while its final rule specifies average return on equity above a threshold; these are not equivalent filters. The accompanying indicator formula and Python example also differ in their amplitude calculation and do not clearly align with the prose.

The rationale is to find active stocks without selecting exceptionally high relative volume, while excluding some financially weak companies. The document offers no test results or evidence that the combination predicts returns. It notes that focusing on technical activity can miss important business and financial risks, and that a short observation window may not represent a company's condition well. Suggested refinements include adding fundamental measures and reviewing parameters against historical data, though no validation method or results are given.

Key ideas

• The screen combines price amplitude and a bounded volume ratio with market-cap and profitability filters.
• The article's descriptions of profitability differ between the initial rule and the final rule.
• The rationale is to find active stocks while filtering out some companies with weak financial records.
• No backtest evidence is provided, and the examples do not fully match the stated conditions.

Tags

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