Stock Screening with RSI, Three Down Days, and MACD

Summary

This stock-screening method combines a 14-period RSI below 65, three consecutive bearish daily candles, and a positive daily MACD condition. The document presents the combination as a way to find shares with recent short-term weakness while retaining a favorable broader trend. It also outlines how to calculate the indicators and apply the conditions to a stock universe.

The article gives no backtest, benchmark, or measured performance evidence. Its rationale is descriptive: RSI and the candle pattern identify candidates, while MACD is meant to filter for trend direction. The source’s formula examples are not fully consistent: the prose specifies MACD above zero, but the code checks whether MACD is rising versus the previous reading. That distinction could change which stocks pass the screen. The method also omits fundamentals and industry context, and the author cautions that technical indicators may be less reliable during unusual market volatility. Additional indicators, fundamental filters, and explicit risk controls are suggested, but not evaluated.

Key ideas

• The screen combines RSI below 65 with three consecutive down candles and a daily MACD condition.
• The stated purpose is to identify recent weakness in stocks while filtering for a favorable trend.
• The prose and code differ on whether MACD must be positive or merely rising.
• The article provides no performance testing and warns that technical signals can weaken during abnormal volatility.
• Fundamental filters and risk controls are suggested as possible extensions.

Tags

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