Screening Stocks by Turnover, Three-Day Declines, and Recent Limit-Up

Summary

This document describes a stock screen combining three conditions: turnover between 3% and 12%, three consecutive declining sessions, and at least one limit-up event during the prior month. It presents the pattern as a way to find actively traded stocks that have pulled back after a recent burst of price strength. The rationale offered is that a recent limit-up may reflect strong buying or active market sentiment, while the decline sequence identifies a potential retracement.

The article supplies example indicator and Python code, but the examples do not align perfectly with the written rules: the Python checks include different price and limit-up calculations, and the displayed indicator code uses a moving-average condition for the decline sequence. The article reports no backtest or performance evidence. It cautions that sentiment can change quickly and that turnover and recent limit-up status alone may select unsuitable stocks. It suggests adding technical and fundamental filters, such as money flows, price behavior, and company financials, before making decisions.

Key ideas

• The screen combines a turnover range, three consecutive declining sessions, and a recent limit-up event.
• The proposed rationale is that a recent limit-up may indicate active buying or market interest before a pullback.
• The article provides example implementations, but their calculations do not fully match the stated screening rules.
• The document gives no performance results and recommends supplementing the screen with other technical and fundamental information.

Tags

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