Stock Screening with RSI, Three Down Days, and a Ten-Day Return Range

Summary

The document presents a stock screen requiring a 14-period RSI below 65, three consecutive sessions in which the close is below the open, and a ten-day return greater than zero but below 35%. This combines a recent sequence of weak daily candles with a positive, bounded return over a longer window. Formula and Python examples show how to calculate the conditions from daily price data.

The article characterizes the rules as a way to find stocks with short-term weakness despite a positive recent trend, but it reports no backtest or performance evidence. It notes that technical indicators can lag or misclassify conditions, that the return cap may exclude other candidates, and that market sentiment is not captured. It suggests adding sentiment, money-flow, or size measures and evaluating the rules across multiple periods. The reference to fundamental analysis is not supported by an explicit fundamental filter, so the described screen is primarily technical.

Key ideas

• The screen requires RSI below 65 and three consecutive down candles.
• It also limits the ten-day return to a positive value below 35%.
• The examples calculate the signals from daily open and close prices.
• The document identifies lag, false signals, and omitted market sentiment as limitations.
• It provides no performance results or evidence that the screen is profitable.

Tags

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