This post will provide a resource link and scan code from the On Trend episodes focusing on RSI for trend-following and momentum strategies. This is a two-part series that goes from RSI basics to a twenty year backtest on stocks in the S&P 500. These episodes will show how RSI can be used to find consistent and persistent uptrends. RSI ranges define trend consistency and unearth stocks with limited pullbacks. Extreme RSI readings define trend persistency and uncover stocks with strong upside momentum. This combination is akin to a dual momentum approach that finds stocks with strong uptrends and strong momentum.
RSI for Trend Following and Momentum (Part 1 on Youtube)
Testing RSI Range-Momentum Signals (Part 2 on Youtube)
This two-part series is based on a detailed research paper I wrote at the end of 2018. You can view this paper here on dropbox.
Programming Note: This article and the accompanying On Trend episodes were prepared ahead of time as I am on vacation until April 19th.
Scanning for Trend and Momentum
The On Trend episodes and research paper used 40 for the low end of the RSI range and 70 to identify stocks with strong momentum. I relaxed the criteria in the scan code to find stocks that did not dip below 39 and that exceeded 69. In addition, I shortened the lookback period from 75 days to 65 days. The objective of this scan is to weed out weak names and focus on strong names. Chartists can then place the results in a ChartList for further analysis.
[country is US]
and [[exchange is NYSE] or [exchange is NASD]]
and [SMA(20,Close) > 10] and [SMA(20,Volume) > 300,000]
and [Min(65,RSI(14)) > 39] and [Max(65,RSI(14)) > 69] and [SMA(5,Close) > SMA(200,Close]
On Trend on StockCharts TV and YouTube
RSI for Trend-Momentum Strategies
Arthur Hill, CMT Senior Technical Analyst, StockCharts.com Author, Define the Trend and Trade the Trend
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