Stock Screening with Price Range, Morning-Star Pattern, and Positive Returns

Summary

This document describes a technical stock screen requiring daily price range greater than 1, a morning-star candlestick condition, and positive recent return. Its rationale is that a larger range may identify active stocks, the candlestick pattern may signal a reversal, and positive return adds a recent strength filter. The note provides formula and Python examples, with the Python version also applying market capitalization and positive price-to-earnings filters.

The stated limitations are that the core screen omits broader company and industry conditions, which may weaken selection quality. It recommends considering volume, trend measures, and fundamentals such as earnings and revenue. No backtest results or other evidence of profitability are reported. The code adds filters beyond the headline rule, and its morning-star checks are a particular implementation rather than a demonstrated standard definition, so the screen’s behavior may differ across data sources and implementations.

Key ideas

• The headline screen combines a daily range threshold, a morning-star pattern, and positive return.\nThe stated rationale is to identify active stocks with a possible reversal and recent strength.\nThe Python example adds market capitalization and valuation filters beyond the headline conditions.\nThe document warns that technical-only screening omits fundamentals and supplies no performance evidence.

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