Stock Screening with RSI, Three Bearish Candles, and a Lower Low

Summary

This stock-selection rule combines three daily price conditions: a 14-period RSI below 65, three consecutive bearish candles, and a current-day low below the previous day's low. The document provides reference implementations for expressing the screen in indicator-query syntax and Python with shifted open, close, and low series. It frames the rule as a short-term technical and market-activity screen, while also suggesting that fundamental and industry measures could be added for broader evaluation.

The document offers no backtest results, benchmark comparison, trading or exit rules, transaction-cost assumptions, or evidence for the stated rationale about market interest and stock quality. The suggested additions, such as valuation and industry factors, are not specified as tested components. The screen should therefore be treated as a candidate selection condition whose behavior and risks require independent testing; by itself it does not define a complete portfolio or risk-control process.

Key ideas

• The screen requires a 14-period RSI below 65.
• It also requires three consecutive sessions in which the close is below the open.
• The current session's low must be below the previous session's low.
• The document suggests adding valuation and industry information but reports no tests of those additions.
• The screen has no specified exits, transaction-cost model, or portfolio risk rules.

Tags

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