Stock Screening with RSI, Three Consecutive Down Days, and Turnover

Summary

The document describes an equity screen combining a 14-period RSI below 65, three consecutive down days, and the prior day’s actual turnover between 3% and 28%. It presents these filters as a way to find stocks after a short decline while retaining a minimum level of trading activity. The article also suggests considering market conditions and company fundamentals, and mentions adding other price or volume indicators as possible refinements.

No performance results or backtest evidence are provided. The proposed rationale is qualitative, and the document cautions that technical and sentiment-based filters omit fundamental information and may select volatile stocks; turnover calculations may also be inaccurate. There is a notable mismatch between the stated three down days and the example formulas, which check prior candles for closes above their opens. The screen should therefore be treated as an illustrative rule set whose conditions need verification before evaluation.

Key ideas

• The screen combines RSI below 65 with a turnover band and a three-session candle condition.
• The stated turnover filter uses the prior day’s actual turnover, bounded between 3% and 28%.
• The article offers no backtest or evidence of realized returns.
• Its example code appears to check bullish candles despite describing three down days.

Tags

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