Stock Screening with Range, Two-Day Highs, and Bollinger Compression

Summary

This stock screen combines daily price movement with a recent high and a volatility-compression condition. It selects stocks whose intraday range exceeds 1%, whose high is the highest of the current and previous day, and whose Bollinger-band variability is below a chosen threshold. The document describes the rounded or compressed pattern as narrowing volatility that might precede a new move, and gives formula examples for the range, two-day high, and band-based test.

The screen is presented as a way to find active stocks that may be poised for a change in direction, but it provides no performance results or validation. It does not define the compression threshold or fully specify how the pattern should be measured, so implementations may vary. The source cautions that the method omits company fundamentals and longer-term price direction; a compressed setup might occur during a trend correction or reversal rather than before a sustained move. It recommends combining technical and fundamental analysis and treating the screen as an initial filter rather than a complete investment decision.

Key ideas

• The screen requires a price range above 1% and a high that matches the two-day maximum.
• It uses low variability in Bollinger-band width as a proxy for a rounded, compressed price pattern.
• The compression threshold is unspecified and needs an implementation decision.
• The screen does not account for fundamentals or establish the direction of a longer-term trend.
• A candidate may be in a temporary correction or reversal, so further analysis is needed.

Tags

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