Stock Screening with RSI, Order Flow, and Reversal Patterns

Summary

The document outlines a Chinese stock selection approach combining an RSI reading below 65, the product of daily price change and net activity attributed to very large orders, and a reversal pattern described as an engulfing move. It presents these as technical and capital-flow filters intended to identify stocks meeting several conditions at once. A code example also filters out stocks marked as special treatment, though its data fields and implementation are not fully explained.

The discussion flags the reversal condition’s dependence on a single pattern, changing market conditions, and the risk that restrictive filters concentrate selections in too few names. It suggests adjusting or removing that condition, adding valuation or growth measures, and considering market and industry trends and capital controls. No backtest, performance figures, precise engulfing definition, or evidence that the filters reduce risk is provided, so the approach should be treated as a screening concept rather than a validated strategy.

Key ideas

• The screen combines RSI below 65 with price change multiplied by net large-order volume and a reversal pattern.
• The example excludes stocks designated as special treatment.
• The document warns that a single reversal condition can miss broader market influences.
• Additional valuation, growth, trend, and capital management criteria are suggested as possible extensions.

Tags

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