Screening Stocks for High Amplitude, Low Price, and Three Bearish Candles

Summary

This example presents a technical stock screen using three conditions: daily amplitude above a threshold, a price below 20, and three consecutive sessions in which the close is below the open. The bearish-candle condition captures recent downward movement, while amplitude is used to characterize price fluctuation. The article provides indicator and Python examples intended to implement the selection logic.

The proposed screen is not accompanied by backtest results or evidence that selected stocks have attractive forward returns. The text itself notes that signals based on three declining candles may lag when new buying enters the market, and it recommends more timely, cleaned data and additional measures such as volume or turnover. There is an inconsistency in the Python example: its candle comparisons use greater-than conditions, which do not match the stated rule that each close is below its open. The exact definition of amplitude also differs across the examples, so implementation requires clarification before results can be interpreted.

Key ideas

• The screen combines amplitude, a price ceiling, and three consecutive bearish candles.
• A bearish candle is defined as a session closing below its opening price.
• The article offers indicator and Python examples but no performance evaluation.
• The text warns that a three-day price pattern may produce delayed signals.
• The Python candle comparisons conflict with the written screening rule.

Tags

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