Stock Screening with Turnover, Reversal Candles, and Profit Growth

Summary

This Chinese equity screen selects stocks with turnover between 3% and 12%, a reversal pattern described as a reversal-covering signal, and year-over-year growth in net profit attributable to parent-company shareholders above 20% and at or below 100%. It combines a short-term price pattern and trading activity with an earnings-growth filter. The document includes formula and data-processing examples, though parts of the example use additional order-flow and futures-related data that are not clearly aligned with the stated screening conditions.

The author cautions that earnings growth alone does not capture a company’s broader financial condition and may favor firms with temporary profit jumps or other hidden risks. The suggested improvements include adding other fundamental measures, considering industry context, and incorporating price momentum. No backtest results or evidence of predictive performance are provided, and the proposed additions are not evaluated. The screen is therefore a set of selection criteria, not a demonstrated investment strategy.

Key ideas

• The screen combines 3%–12% turnover, a reversal pattern, and specified year-over-year profit growth.
• The earnings filter covers growth above 20% and up to 100%.
• Profit growth alone can overlook other financial risks and temporary earnings changes.
• The document suggests adding fundamental, industry, and momentum measures.
• No performance test is reported, and some example data steps do not clearly match the stated criteria.

Tags

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