Screening Stocks by Daily Range, Reversal Pattern, and Five-Day Average

Summary

This Chinese equity selection note describes a three-part screen: daily high-low range above a stated threshold, a reversal pattern, and price above its five-day moving average. It frames the moving-average condition as a way to favor stocks in an upward short-term trend and supplies example indicator logic and a Python implementation, with a heat ranking mentioned for sorting selected stocks.

The note warns that combining these conditions may make the screen too restrictive and miss otherwise attractive companies. It suggests adding other information, such as institutional ownership, for a broader assessment. No backtest, performance results, or precise validation of the reversal-pattern implementation is provided; the examples also use differing descriptions of that pattern. The screen should therefore be treated as an illustrative selection rule whose definitions and behavior require independent checking.

Key ideas

• The screen requires a minimum daily high-low range, a reversal pattern, and price above the five-day moving average.
• The moving-average filter is intended to retain stocks with positive short-term price direction.
• The example describes ranking selected names by heat, but reports no test results.
• The author notes that the combined conditions may exclude too many candidates.
• The reversal-pattern definition varies between the stated logic and the sample implementation.

Tags

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