Illustrative Filters and What They Cannot Prove
The thresholds below are examples for making a screen reproducible. They have not been optimized or backtested here. Passing them does not establish liquidity, business quality, institutional sponsorship, or future recovery.
| Category | Input | Illustrative Rule | Interpretation |
|---|---|---|---|
| Trend | Price and moving averages | Price > 200-day SMA; 50-day SMA > 200-day SMA | Describes relative price position, not who owns or buys the stock. |
| Retracement | Adjusted close / 52-week high − 1 | Between −15% and −5% | A chosen search range, not a definition of a healthy decline. |
| Momentum | 14-day RSI | Between 40 and 52 | Narrows the sample; does not confirm a bottom. |
| Business | ROE and earnings growth | ROE > 15%; positive year-over-year EPS growth | Review leverage, buybacks, negative equity, and one-time earnings before interpreting these figures. |
| Liquidity | Dollar volume and bid-ask spread | Set limits relative to the intended order size | Check execution conditions directly; market capitalization alone is insufficient. |
| Volume | Current volume / 20-day average | Below 1 on a declining bar | Describes activity, not seller identity or exhaustion. |