Screening Stocks for Seven Down Days, Turnover, and a Rounded Rebound Shape
Summary
The proposed equity screen looks for stocks with turnover between 3% and 12%, seven consecutive declining sessions, and a price pattern described as resembling a rounded base. The article presents formula examples for implementing the conditions and adds a threshold based on the latest close relative to recent lows or closes, intended to identify a possible rebound. It frames the pattern as a way to refine a basic decline-and-turnover screen, then suggests adding valuation measures or indicators such as RSI, MACD, and moving averages.
The document offers no backtest, return series, or evidence that the rounded shape predicts reversals. It explicitly notes that the screen omits broader market risk and fundamentals, that its eligible universe may be narrow, and that shape interpretation can be subjective. The formula examples also require adaptation to the data source and indicator naming conventions. The screen should therefore be treated as a hypothesis for testing, not a validated entry rule.
Key ideas
- The screen combines a 3%–12% turnover range with seven consecutive declining sessions.
- A rounded price shape and a recent price condition are used to seek possible rebound candidates.
- The article provides formula examples but does not report backtest results.
- It identifies subjectivity in pattern classification and omission of market and fundamental risks.
- Valuation measures and technical indicators are suggested as possible additional filters.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.