Stock Screening with RSI, Three Down Days, and a Recent Limit-Up

Summary

This stock-selection approach combines a 14-period RSI below 65 with three consecutive declining sessions and at least one limit-up event in the prior 25 days. The article presents the conditions as a way to find shares with recent price strength but weaker short-term technical action. It includes example indicator logic and Python-style screening code, though the examples do not establish that the conditions are profitable.

The author cautions that a recent limit-up may reflect temporary enthusiasm and leave a stock overbought, while technical indicators can lag or give false signals. The screen also omits fundamentals and requires risk controls and testing across multiple time periods. Suggested extensions include adding sentiment, capital-flow, or fundamental measures and assigning weights so that one condition does not dominate. No performance data or backtest results are provided.

Key ideas

• The screen requires RSI below 65 and three consecutive sessions in which the close is below the open.
• It also requires a limit-up event within the preceding 25 days.
• The article frames the combination as a way to pair short-term weakness with evidence of recent market enthusiasm.
• A prior limit-up can coincide with overbought conditions, and technical indicators can lag or misclassify signals.
• The rules need risk controls and multi-period backtesting before practical use.

Tags

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