Screening Stocks for Reversal Patterns and Sustained Large-Order Buying

Summary

This stock screen combines daily amplitude above 1%, a reversal or “engulfing” style pattern, and large-order net volume above 0.05 for at least three consecutive days. Its refined version also requires the stock’s industry group to be rising. The article supplies indicator-formula and Python examples, using price data, large-order flow, and an industry direction signal to identify candidates.

The explanation frames the conditions as a blend of trading activity, price direction, and participation by large orders. It warns that the signal can miss opportunities and that large-order net volume may be an imperfect predictor. Industry performance, market sentiment, and fundamentals are suggested as additional filters. The article does not report a backtest, define the reversal pattern consistently across its examples, or establish that the thresholds generalize across markets or periods.

Key ideas

• The screen combines amplitude above 1%, a reversal pattern, and large-order net volume above 0.05 over at least three consecutive days.
• The refined criteria add a rising industry group.
• The article provides formula and Python examples for the indicators and selection conditions.
• The document cautions that large-order flow can be misleading and that the screen may omit opportunities.
• No backtest is provided, and the reversal definition differs across the examples.

Tags

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