Stock Screening with RSI, Order-Book Imbalance, and MACD

Summary

This stock screen combines three technical conditions: RSI below 65, first-level bid volume greater than first-level ask volume, and MACD at or above zero. It is intended to find shares with positive trend momentum while avoiding readings the author considers overheated. The post gives formula and Python examples for calculating indicators and filtering a stock list, though the Python filter shown does not include the stated RSI condition.

The discussion identifies limits: technical signals do not assess company fundamentals or broader market conditions, and a small resulting selection may be volatile. It suggests adding valuation measures such as price-to-earnings or price-to-book ratios and setting stop-losses, profit targets, and position limits. No backtest, performance statistics, or evidence of predictive success is provided, so the screen is best understood as an illustrative signal recipe rather than a validated strategy.

Key ideas

• The screen requires RSI below 65, bid volume above ask volume, and MACD at or above zero.
• The author interprets positive MACD as an uptrend and bid-side volume dominance as buying pressure.
• The provided Python filter omits the RSI condition stated in the strategy description.
• Technical-only screening can overlook fundamental, industry, and market risks.
• The post recommends adding fundamental filters and using stop-losses, profit targets, and position limits.

Tags

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