Screening Stocks by Range, RSI, and Three Declining Closes

Summary

This stock-selection rule looks for an amplitude above a stated threshold, an RSI below a stated ceiling, and three consecutive declining closes. The article interprets amplitude as a measure of price fluctuation, RSI as a way to identify relative strength conditions, and the sequence of falling closes as evidence of a downward move. It proposes adding trading activity, fund-flow data, company financials, and industry context, and gives an example of ranking selected names by relative price strength.

The conditions define a screen, not a complete trading system: there are no entry, exit, holding-period, or risk rules. The document warns that market and volume changes make indicator-based selection uncertain and that fundamental quality is omitted. It supplies indicator formulas and example logic, but no backtest, benchmark comparison, or performance results. The relative-strength ranking is not shown to improve outcomes, so the screen’s predictive value remains untested.

Key ideas

• The screen combines price amplitude, an RSI threshold, and three consecutive lower closes.
• The article proposes adding trading activity, fund flows, financial measures, and industry context.
• It describes ranking qualifying stocks by relative strength, but reports no evidence that this improves results.
• The screen lacks specified trade entries, exits, holding periods, and risk controls.
• No backtest or benchmark comparison is provided.

Tags

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