Stock Screening with RSI, Seven Down Days, and a Rising Moving Average Trend

Summary

The proposed equity screen selects stocks with RSI below 65, seven consecutive down sessions, and a 20 day moving average above the 120 day average. The combination looks for a recent pullback within a longer-term upward trend, using the RSI threshold as an additional filter. The page also supplies indicator formula references and sample Python intended to illustrate how to assemble the conditions.

The author identifies limitations: the rules rely on technical data, may select volatile stocks, and may not adapt well when market conditions change. The suggested refinements include adding fundamental measures or other indicators and adjusting moving-average windows for the stock and market cycle. No historical test, benchmark, transaction-cost estimate, or realized performance evidence is presented. The sample code should be treated as illustrative rather than validated implementation, and the screening rules alone do not define entry timing, exits, or portfolio risk controls.

Key ideas

• The screen requires RSI below 65, seven consecutive sessions where the close is no higher than the open, and the 20 day average above the 120 day average.
• The down-session condition identifies a pullback while the moving-average condition selects for a longer-term upward trend.
• The author warns that technical-only criteria can miss fundamental and changing market risks.
• Suggested extensions include additional indicators and market-sensitive moving-average windows.
• The document supplies sample formulas and code but reports no backtest or performance evidence.

Tags

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