Your first screen: oversold bounce candidates
How a stock screen actually works, using the simplest useful filter there is.
A screener is just a filter over the whole market. You give it a rule; it hands back every stock that matches, right now. Let's build the simplest useful one: stocks that are heavily oversold and due a possible bounce.
The anatomy of a filter
Every screen rule has three parts — an indicator, an operator, and a value. Our rule is:
RSI(14) is less than 30RSI is the momentum gauge from the charts lessons. Below 30 means the stock has been sold off hard relative to its own recent range — the classic 'oversold' zone where bounces often start.
Why this is a starting point, not a buy signal
Oversold doesn't mean 'about to go up' — a stock in a Stage-4 decline can stay oversold for weeks. That's why pros combine filters. Oversold and in an uptrend is far stronger than oversold alone:
- •Oversold alone: RSI(14) < 30 — a watchlist, not a buy list.
- •Stronger: RSI(14) < 35 and price above the 200-day average — a pullback inside an uptrend.
Tip · Run a screen, then open the top few names on a chart before doing anything. The screen finds candidates; the chart confirms them.
AlphaGrid Learn is educational content, not investment advice.