Stock Screening with RSI, Three Consecutive Down Days, and Positive PE

Summary

This stock selection rule combines a 14-period RSI below 65, three consecutive declining sessions, and a positive price-to-earnings ratio. The article frames the conditions as a blend of technical behavior and a basic profitability valuation filter, and includes illustrative formula and Python snippets for applying them. The intended output is a list of stocks meeting all three criteria.

The source provides no backtest, return figures, comparison group, or other evidence that the screen identifies stocks likely to rise. It acknowledges that positive PE does not guarantee durable or improving earnings, and that short-term price history may not predict future direction. It suggests supplementing the screen with financial, industry, or additional technical measures, but offers no tested specification for doing so. The example also labels the prior three sessions as down days through close/open comparisons, a detail users should verify against their own definition of a declining session.

Key ideas

• The screen requires RSI below 65, three consecutive down sessions, and positive PE.
• The RSI calculation in the example uses a 14-period lookback.
• The PE filter does not ensure that earnings are strong or sustainable.
• The article offers no backtest or evidence of predictive performance.

Tags

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