Screening Stocks by Trading Range, RSI, and Profit Growth
Summary
The screen selects stocks with an amplitude measure above one, RSI below 65, and year-over-year growth in net profit attributable to parent-company shareholders above 20% and no more than 100%. It combines a short-term price range condition and a momentum or overbought indicator with a fundamental earnings-growth filter. A reference formula defines amplitude relative to the prior close, while the RSI example uses smoothed gains and losses.
The text suggests ranking qualifying names by relative price strength and retaining the strongest fifth, but supplies no backtest or evidence that these filters improve returns. It notes that profit growth can be volatile and that focusing on this measure omits other company and market risks. It also proposes adding indicators and valuation or governance measures, though these are suggestions rather than tested improvements. The examples are implementation references and should not be treated as a validated strategy specification.
Key ideas
- The screen combines a daily amplitude threshold with an RSI ceiling.
- It requires year-over-year attributable net profit growth within a specified positive range.
- A relative-strength ranking is suggested to select the strongest fraction of qualifying stocks.
- The document warns that earnings growth alone omits other company and market risks.
- No performance results are provided to validate the screening rules.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.