Stock Screening by Daily Range, Drawdown, and Arc Pattern

Summary

This article describes a short-term stock screen that combines daily amplitude above 1, a daily loss between 4% and 5%, and a “round arc” chart pattern. It presents the pattern as a way to identify possible support and resistance areas, while the amplitude and loss filters focus the screen on volatile stocks. The article also gives example indicator conditions and a Python-style outline for selecting stocks that meet them.

The screen is a technical setup, not a complete trading system: it does not specify entry timing, exits, portfolio construction, or tested performance. The author cautions that relying on chart indicators can omit company fundamentals and broader market conditions, and that arc-pattern identification may be subjective. Suggested safeguards include checking business and industry factors, setting stop-loss and take-profit levels, and managing position sizes. The code is illustrative and may need adjustment to the data source and indicator implementation.

Key ideas

• The screen selects stocks with amplitude above 1 and daily losses between 4% and 5%.\nIt adds a round-arc chart pattern intended to indicate potential support or resistance.\nThe article offers sample indicator logic and a Python outline, rather than a fully specified trading system.\nTechnical-only screening can overlook fundamentals and market conditions, while pattern identification may be subjective.\nThe author recommends risk controls such as stops and position sizing.

Tags

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