Stock Screening with RSI, Consecutive Down Candles, and a Five-Day Average

Summary

This stock selection rule combines a 14-period RSI below 65, price above its five-day moving average, and a reversal pattern. The article’s final formulation calls for three consecutive bearish candles followed by a bullish candle. It presents indicator formulas and sample implementation references, and ranks qualifying stocks by percentage change in descending order.

The source text is internally inconsistent: an earlier description refers to three bearish candles, while the displayed conditions for the preceding candles use closing prices above opening prices, which indicates bullish candles. No backtest results or evidence of effectiveness are supplied. The article also cautions that technical indicators can lag and that the screen omits company fundamentals; suggestions include adding volume or other indicators and fundamental inputs.

Key ideas

• The screen requires RSI below 65 and closing price above the five-day moving average.
• The final rule describes three bearish candles followed by a bullish candle, but the displayed conditions conflict with that description.
• Qualifying stocks are ranked by percentage price change.
• The article provides no performance evidence and notes that technical-only screening can omit fundamentals and react with a lag.

Tags

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