Stock Screening with RSI, Three Consecutive Down Days, and Market Cap

Summary

This stock screen combines a 14-period RSI below 65 with three consecutive bearish sessions and a minimum market capitalization of 200 million. It also includes a nonnegative trailing price-to-earnings filter in its example formulas. The stated rationale is to use technical conditions alongside a size threshold that excludes smaller companies. The document provides sample implementations and describes the setup as a screening rule rather than a complete trading system.

The article cautions that market capitalization alone can omit smaller companies with promising fundamentals and suggests adding measures such as revenue growth, earnings per share, and price-to-book value. It reports no backtest, performance statistics, or evidence that the conditions improve returns. The screen also leaves details such as signal timing, portfolio construction, and risk controls unspecified, so its usefulness as a standalone strategy is limited.

Key ideas

• The screen requires RSI below 65 and three consecutive down sessions.
• It sets a minimum market capitalization of 200 million.
• The example formulas also filter for nonnegative trailing price-to-earnings values.
• The article recommends adding fundamental measures to broaden the assessment of company quality.
• No performance testing or evidence of profitability is provided.

Tags

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