Stock Screening with RSI, Consecutive Candles, and Moving-Average Crossovers

Summary

This stock-screening idea combines a relative strength index below a stated threshold with three consecutive down sessions and a moving-average crossover. The written description specifies a weekly five-period average crossing above a ten-period average, presenting the crossover as a trend filter alongside short-term price weakness. It also supplies formula examples and a Python-style implementation for calculating RSI, moving averages, and candle conditions.

The examples do not fully agree with the stated setup: the code calculates averages on the supplied close series without making them weekly, and its shifted candle comparisons identify prior sessions with closes above opens rather than down candles. The formula also checks for a cross while requiring the faster average already to be above the slower one. The article itself notes signal lag and says the indicator combination may not suit some high-growth or emerging-sector stocks. It offers possible additions such as volume analysis and fundamentals, but gives no backtest, returns, or evidence that the screen is profitable.

Key ideas

• The proposed screen combines RSI below its threshold, three consecutive down sessions, and an upward moving-average crossover.
• The prose specifies weekly moving averages, while the sample code does not resample data to a weekly frequency.
• The candle comparisons in the examples appear to select rising candles rather than falling candles.
• The article identifies lag and limited suitability for some fast-growing companies as risks.
• No backtest or performance evidence is provided.

Tags

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