Screening Stocks for Rising Lows After a 4%–5% Daily Decline
Summary
The document describes an equity screen combining three conditions: daily amplitude above 1%, rising price lows, and a largest daily decline between 4% and 5%. It frames the decline as a short-term pullback and uses the other conditions to identify stocks whose price movement may still show support. It provides example indicator logic and a Python-style selection example, but does not report backtest results or evidence that the screen produces profitable trades.
The author cautions that the rules focus on short-term sentiment and price behavior while omitting company finances and earnings prospects. The suggested extensions include adding valuation and other technical measures, as well as accounting for macroeconomic and policy conditions. The document does not specify how to define the rising-low condition consistently across data sources, or how to manage entries, exits, and risk, so the screen is best understood as an initial selection rule rather than a complete trading strategy.
Key ideas
- The screen requires amplitude above 1%, rising lows, and a daily decline between 4% and 5%.\nThe decline condition is intended to identify stocks undergoing a short-term pullback.\nThe document offers example formula and Python implementations but gives no performance evaluation.\nFinancial strength, earnings prospects, and explicit trade and risk rules are not included.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.