Stock Screening with RSI, Moving-Average Expansion, and Recent Gains

Summary

This stock-selection method combines three filters: a 14-period RSI below a ceiling, upward divergence or expansion in the day’s moving averages, and a positive but bounded return over the previous ten days. The article says selected stocks should receive equal capital allocations. It provides indicator references and a sample Python procedure that additionally applies liquidity and stock universe filters, then ranks candidates by circulating market value.

The screen is framed as a way to find stocks with recent upward movement while avoiding the most extended RSI readings. However, the text offers no backtest, transaction-cost analysis, or evidence that these conditions predict future returns. It warns that short-term speculative names and market-regime shifts can make results random, and suggests adding fundamental measures or lengthening the analysis horizon. The sample implementation is not fully consistent with the stated selection logic, so its precise behavior would need independent review.

Key ideas

• The stated screen requires RSI below a threshold, rising or spreading moving averages, and a bounded positive ten-day return.
• The article proposes allocating capital equally across selected stocks.
• Its sample code adds liquidity-related filtering and market-value ranking beyond the headline criteria.
• No performance evidence is reported, and the article flags short-term randomness and regime sensitivity.
• Fundamental measures and longer lookback periods are suggested as possible refinements.

Tags

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