Oversold Quality Large-Caps
Markets occasionally sell off high-quality large-caps along with everything else — sentiment-driven drawdowns, sector ETF rebalancing, or panic selling. When the underlying fundamentals haven't changed, these moves are noise.
This screen looks for that pattern: large-cap names with a 14-day RSI below 35 (technically oversold), but a Tessera Rating above 70 (fundamentally sound). The thesis is mean-reversion — quality companies don't stay oversold forever. Read the regime detection methodology to understand when this screen is most effective.
Criteria
- Market cap: Greater than $10B (large-cap only)
- Recent price action: 14-day RSI below 35 — technically oversold
- Quality score: Tessera Rating ≥ 70 / 100
- Balance sheet: Debt/equity below sector median
Underlying methodology
See the current top 10 stocks for this screen
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Sign up freeFrequently asked questions
Is this a contrarian or mean-reversion strategy?
Mean-reversion. The thesis is that high-quality businesses with sound balance sheets occasionally get sold off below fair value — typically due to short-term sentiment or sector-wide drawdowns. The screen identifies candidates where the price action looks panicky but the fundamentals haven't changed.
What is RSI?
Relative Strength Index — a 14-day momentum oscillator that scales from 0 to 100. Readings below 30 historically mark short-term oversold conditions. This screen uses 35 as a threshold to catch slightly broader candidates.
Does mean-reversion always work?
No. In trending bear markets or during regime shifts, oversold stocks can stay oversold or fall further. This screen is most effective in neutral-to-bullish regimes where individual drawdowns are noise rather than signal. Pair with regime detection.