Screening Stocks with Moving Averages, RSI, and Volume Growth

Summary

This stock-selection rule requires the 20-day moving average to be above the 120-day average, RSI to be below 65, and current volume to exceed the prior day's volume by more than five percent. The article interprets the moving-average relationship as an established upward trend, while the RSI and volume conditions are intended to capture comparatively moderate momentum alongside increased activity. It includes indicator formulas and a sample implementation, though the code measures volume growth rather than the stated increase in holdings, so the signal's meaning is not fully consistent across the text.

The article gives no backtest results or performance evidence. It notes that RSI and the volume measure reflect short-term market behavior and may overlook fundamentals, and that selected stocks may perform poorly over longer periods. Suggested additions include company fundamentals and other price indicators. These are screening criteria with an asserted rationale, not a validated forecast or complete portfolio strategy; the document does not specify entry timing, exits, position sizing, or risk controls.

Key ideas

• The screen requires the 20-day moving average to exceed the 120-day average, RSI below 65, and volume growth above five percent versus the previous day.
• The longer-term moving-average comparison is used as a trend filter, while RSI and volume represent shorter-term conditions.
• The description's increase-in-holdings wording differs from the volume ratio used in its formulas and example.
• No backtest is reported, and the article warns that short-term signals may miss fundamental risks or fail over longer horizons.

Tags

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