Screening Stocks with Range, a Fresh KDJ Cross, and Ten-Day Gains

Summary

This stock-selection recipe combines three conditions: a daily high-low range above 1%, a newly formed KDJ crossover, and a ten-day price gain above zero but below 35%. The article frames the range filter as a way to find active shares, the crossover as a sign of possible improving momentum, and the gain band as a way to avoid both declining stocks and those with very large recent advances. It includes formula and Python examples for calculating the filters.

The note identifies several limitations: volatile stocks may have weak fundamentals, KDJ can produce false turns, the return band can leave a small candidate pool, and no company fundamentals are included. It suggests broadening the screen with liquidity, size, valuation, profitability, and additional indicators, then reviewing historical outcomes. No backtest or performance evidence is provided. The code examples also differ in details, including how the crossover is defined, so implementation choices should be checked before relying on the screen.

Key ideas

• The screen requires daily range above 1%, a fresh KDJ crossover, and a positive ten-day gain below 35%.
• The article treats these filters as activity, momentum, and recent-return constraints.
• It warns that volatility and KDJ turning points can produce poor selections.
• Fundamental and liquidity measures are suggested as additional filters.
• No backtest results are presented, and the code examples do not define the crossover identically.

Tags

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