Stock Screening with RSI, Three Down Candles, and Sustained ROE

Summary

This Chinese-language article outlines a stock screen combining a 14-period RSI below 65, three consecutive bearish candles, and return on equity above 15% across five years. The stated aim is to find stocks with recent technical weakness alongside a record of strong profitability. It provides reference formulas for calculating RSI and the candle pattern, and describes averaging five years of ROE data before filtering candidates.

The article notes that a high ROE requirement may exclude smaller, faster-growing firms and that the selected stocks could have limited short-term upside. It suggests adding financial measures such as valuation or debt and other technical indicators to refine the screen. The document supplies implementation examples, but no backtest results, universe definition, accounting-data timing safeguards, or evidence that the screen earns excess returns. Its descriptions of intrinsic value and investment quality are claims about the screen’s intent, not demonstrated outcomes.

Key ideas

• The screen combines RSI below 65 with three consecutive bearish candles.
• It adds a five-year ROE condition above 15% to favor firms with sustained profitability.
• The article provides example formulas and code for implementing the filters.
• The author warns that the ROE threshold can miss smaller growth companies.
• No backtest evidence or safeguards against financial-data timing issues are reported.

Tags

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