Stocks that are about to do a reversal

First, a quick reality check

No screen can guarantee to find stocks that are definitely about to reverse trend. What these filters do is identify stocks that show technical signs commonly associated with a higher probability of a bullish reversal (typically from a downtrend or consolidation into an up-move).

Screening Filters

1. Price: min = 3, max = 50

   • Purpose: Focus on reasonably priced, tradable stocks and avoid extreme penny stocks or very high-priced names.
   • Rationale:
     • Stocks under $3 often behave erratically, with unreliable technical signals and higher manipulation risk; excluding them makes reversal signals more trustworthy.
     • Capping at $50 keeps the universe in a range many traders focus on for active trading and short‑term swing setups, where reversals are commonly played.

2. Monthly Average Dollar Volume: min = 300,000

   • Purpose: Ensure minimum liquidity so you can realistically trade the reversal (enter and exit without huge slippage).
   • Rationale:
     • Dollar volume (price × volume) is a better proxy for tradability than share volume alone.
     • A $300K+ average means there’s enough institutional or active participation for technical levels (support, moving averages) to matter and for orders to be filled more reliably.

3. RSI Category: moderate

   • Purpose: Look for reversals where momentum is stabilizing rather than at an extreme.
   • Rationale:
     • A “moderate” RSI typically means the stock isn’t extremely overbought or oversold.
     • For “about to reverse” setups, you often want a situation where selling pressure has eased and momentum is moving from weak to neutral/early-strong, instead of something already deeply oversold (where the bounce might already be underway or riskier) or overbought (where a reversal down is more likely).
     • This helps target more balanced setups where a new trend can emerge rather than chasing exhausted moves.

4. Moving Average Relationship: PriceCrossAboveMA20

   • Purpose: Capture potential bullish trend reversals using a key short-term trend indicator.
   • Rationale:
     • The 20-day moving average (MA20) is a common short-term trend gauge.
     • Price crossing above the MA20 after having been below is a classic early signal that a downtrend or sideways phase may be reversing into an uptrend.
     • This filter is directly aligned with “about to reverse” in the bullish direction: it screens for the actual crossover event that many traders use as a trigger.

5. Support/Resistance Relationship: PriceAroundSupport

   • Purpose: Focus on stocks trading near key support levels where bounces (reversals up) often originate.
   • Rationale:
     • Support zones are areas where buyers historically step in; price tends to stabilize or reverse there rather than continue falling.
     • When price is around support and simultaneously showing signs of strength (e.g., crossing above MA20), it strengthens the case for a potential reversal up from that level.
     • This directly matches the idea of “about to do a reversal” by anchoring the setup to an important price area.

6. One-Week Predicted Return: min = 0

   • Purpose: Filter for stocks where a predictive model is not expecting negative performance in the near term.
   • Rationale:
     • A non-negative predicted return over one week means the model at least doesn’t expect further downside and may see upside potential.
     • When combined with technical reversal signals (MA cross, support), this helps align the statistical/forecast view with the technical view, improving the probability that the “reversal” is upward, not just noise.

Why Results Match the Request

• The screen specifically targets early bullish reversal conditions: price crossing above the 20-day moving average while near a support area.
• Liquidity and price constraints ensure the results are tradable and less prone to erratic moves that can invalidate technical setups.
• The moderate RSI and non-negative predicted 1-week return tilt the list toward stocks where downside pressure has likely eased and where there is at least some expectation of stability or upside.
• Together, these filters narrow down to stocks that exhibit multiple, converging signs of a potential trend change, which is the most practical interpretation of “stocks that are about to do a reversal.”