Screening Stocks with RSI, Earnings Growth, and Reversal Signals

Summary

This Chinese-language strategy note proposes screening equities with a 14-period RSI below 65, parent-attributable net profit growth between 20% and 100%, and a reversal pattern described as a “wraparound” stock. It frames the setup as a way to find relatively weak recent price action alongside positive earnings growth and a potential rebound. Example database and Python implementations are included, with filters for profitable companies and listed stocks.

The author notes that the screen omits other financial measures, including leverage and return on equity, and that the reversal pattern is not clearly defined. The suggested improvements are to add fundamental and market-cap filters and make the pattern definition more objective. The note warns that the setup may be less suitable in stable or strongly trending markets. It presents no backtest or performance results, and the sample code’s growth calculation may not match the stated year-over-year earnings-growth criterion, so implementation details need validation.

Key ideas

• The screen combines RSI below 65, net profit growth from above 20% through 100%, and a reversal-pattern condition.
• The rationale pairs weaker recent price action with positive earnings growth to seek potential rebounds.
• The author identifies omitted fundamentals and an ambiguous reversal definition as important limitations.
• Additional financial and market-cap criteria and a more objective pattern rule are suggested.
• No performance evidence is provided, and the sample growth calculation warrants validation.

Tags

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