Stock Screening with RSI, Three Bearish Sessions, and Opening Gaps

Summary

This note describes an equity screen combining a 14-period RSI below 65, three consecutive down sessions, and an opening change between -2% and 5%. It frames the setup as a search for stocks showing recent weakness while retaining possible rebound potential. The article includes indicator and Python examples for expressing the filters, though the examples differ in how the three-session condition is represented.

The rationale is that RSI and consecutive declines identify weakness, while the opening-price range constrains the next session's move. The document presents no backtest, performance figures, or evidence that the setup predicts rebounds. It warns that short-term technical signals can lag and may select stocks in an ongoing decline. Suggested extensions include adding other indicators and fundamental measures, while considering longer-term direction.

Key ideas

• The screen requires RSI below 65 and three consecutive bearish sessions.
• It also limits the opening price change to between -2% and 5%.
• The author interprets the filters as identifying weak stocks with possible rebound potential.
• No backtest or performance evidence is provided, and lagging signals may capture ongoing declines.

Tags

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