Screening Stocks with RSI, Three Down Days, and Relative Volume

Summary

This stock-selection screen combines a 14-period RSI below 65 with three consecutive sessions in which each close is below its open. It also requires relative volume to be above 1.5 and below 6. The article presents the conditions as a way to find weak short-term price action among stocks with notable trading activity, and includes example formulas for implementing the screen in a Chinese stock-selection platform.

The document explains the indicator logic but provides no performance figures or backtest results for this particular screen. It cautions that the rules omit broad market direction, valuation, and company financial condition. Relative volume can fluctuate, and selecting for activity may raise trading costs. The author suggests considering market and industry trends, valuation, sentiment, and additional liquidity measures such as float market value and turnover. The code examples contain platform-specific assumptions, including an incompletely specified rolling-window parameter, so implementation details would need checking before use.

Key ideas

• The screen requires RSI below 65 and three successive bearish candlesticks.
• It filters for relative volume between 1.5 and 6 to focus on actively traded stocks.
• The article frames the combination as a short-term weakness screen rather than a complete investment process.
• The rules do not account for market conditions, valuation, or company fundamentals.
• The document provides no backtest evidence and warns that high activity can increase transaction costs.

Tags

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