Selecting Stocks by Turnover, Reversal Candles, and the Ten-Day Average

Summary

This stock-selection idea looks for equities with turnover between 3% and 12%, a reversal-style engulfing or “rebound” candle pattern, and an opening price near the prior ten-day moving average. The formula expresses the opening-price band as within 2% of that average and combines it with a recent-candle condition. The Python example outlines calculating candle-range ratios, comparing the open with the moving average, and joining these filters with turnover data.

The document presents the conditions as a technical screen intended to identify active stocks near a short-term reference price. It provides no backtest, trade outcomes, or evidence that the pattern predicts returns. It also notes that the method omits company fundamentals and risk controls, and suggests adding valuation, trend analysis, or other inputs. The sample implementation has data and filtering inconsistencies, so it should not be treated as a verified specification. It describes candidate selection only, without a complete entry, exit, or position-sizing plan.

Key ideas

• The screen requires turnover between 3% and 12%, a reversal-style candle pattern, and an opening price near the ten-day moving average.
• The formula places the opening price within a 2% band around the referenced moving average.
• The example implementation calculates candle-range measures and joins them with moving-average and turnover filters.
• The document provides no test results demonstrating that the conditions predict profitable trades.
• Fundamental analysis and explicit risk controls are absent, and the sample implementation contains inconsistencies.

Tags

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