Daily RSI Below 30 on US Stocks｜Near vs Away from Earnings
ENTRIQ backtest of 100 US stocks on daily charts (5–56 years each), comparing RSI-below-30 signals within 5 trading days of earnings with all other periods.
About this article
These are the results of backtesting 100 stocks in ENTRIQ (5 to 56 years of data depending on the stock) (Dataset v2.0). Focusing on phases where RSI(14) crossed below 30, this article compares how the results differed between the 5 trading days before and after an earnings date (hereafter "near earnings") and all other periods (hereafter "away from earnings"). This is an observation of historical data, not investment advice.
Why the combination of earnings and RSI below 30 matters
US companies report earnings once a quarter. Expectations and worries about results often lead to large price moves around the release. If RSI(14) drops below 30 at that time, many traders may feel the stock "might be oversold" and consider buying.
However, a sharp drop around earnings can also be a reaction to weaker results. The aim of this article is to examine historical data on how RSI-below-30 signals, a common indication of oversold conditions, performed around earnings releases.
Test conditions
Universe and period
- Universe: 100 US stocks selected from the current S&P 500 constituents, taking the largest by market cap with up to 15 stocks per sector
- Period: The full history available for each stock. Only stocks with at least 5 years of data (5 to 56 years depending on the stock)
- Timeframe: Daily (split-adjusted)
Entry definition
Buy at the open on the next trading day after RSI(14) (Wilder's smoothing) crosses below 30. New signals in the same stock while a position is open are skipped (only one position at a time).
Exit patterns
- Pattern A (A_rsi50): Exit at the open on the next trading day after RSI returns to 50 or above (if it doesn't, exit at the close on the 60th trading day). No stop loss
- Pattern B (B_10bars): Exit at the close on the 10th trading day after entry. No stop loss
- Pattern C (C_stop5): Stop loss at -5%. If the stop isn't hit, exit at the close on the 10th trading day. If the stock gaps down at the open, the fill is at that open price, so a single trade's loss can exceed -5%
Coverage of earnings date data and unclassified trades
Earnings date data is only available from 2008 onward. Entries before that could not be classified as either "near earnings" or "away from earnings." There are 3,017 unclassified trades in pattern A, 4,064 in pattern B and 4,542 in pattern C, a large share of each pattern's total. Keep in mind that the earnings comparisons below are observations limited to the classifiable samples from 2008 onward.
About survivorship bias
This test uses the current S&P 500 constituents. Stocks that were delisted in the past, or removed from the index because of deteriorating results or other reasons, are not included. As a result, there is "survivorship bias," which skews the results in a more favorable direction than reality.
Results (overall)
First, here are the overall results for the 3 patterns, regardless of the earnings classification.
| Metric | A_rsi50 | B_10bars | C_stop5 |
|---|---|---|---|
| Sample size (N) | 5,318 | 7,029 | 7,865 |
| Share of trades closed in profit | 72.2% | 56.9% | 45.9% |
| Average P/L | +2.21% | +1.20% | +0.54% |
| Average loss (trades closed at a loss) | -8.78% | -5.58% | -4.40% |
| Profit factor | 1.92 | 1.51 | 1.23 |
| Largest loss | -93.3% | -72.5% | -37.9% |
| Longest losing streak (per stock) | 7 | 12 | 16 |
| Median MAE (maximum adverse excursion) | -4.73% | -3.57% | -3.76% |
| Average holding period | 19.2 trading days | 10.0 trading days | 7.6 trading days |
Note: Past sample (N=5,318, N=7,029, N=7,865); not indicative of future results.
The share of trades closed in profit, average P/L and profit factor were all highest in pattern A, followed by pattern B and then pattern C. On the other hand, the largest loss and the average loss (trades closed at a loss) were the largest (most negative) in pattern A, showing that with no stop loss, some positions were held while losses grew. The longest losing streak (the longest run of losses within a single stock) was highest in pattern C, followed by pattern B.
Comparing near earnings with away from earnings
This is the core of the article. The 5 trading days before and after an earnings date are defined as "near earnings," and all other periods as "away from earnings."
Pattern A (A_rsi50)
| Metric | Away from earnings | Near earnings |
|---|---|---|
| Sample size (N) | 1,750 | 551 |
| Share of trades closed in profit | 75.4% | 67.3% |
| Average P/L | +2.63% | +1.45% |
| Average loss (trades closed at a loss) | -8.16% | -6.89% |
| Profit factor | 2.31 | 1.65 |
| Largest loss | -72.6% | -37.2% |
| Longest losing streak (per stock) | 6 | 5 |
| Median MAE (maximum adverse excursion) | -4.04% | -5.01% |
| Average holding period | 18.0 trading days | 21.3 trading days |
Note: Past sample (N=1,750, N=551); not indicative of future results.
In pattern A, the share of trades closed in profit, average P/L and profit factor were all higher away from earnings. The average loss (trades closed at a loss) and the largest loss were also larger (more negative) away from earnings, so the two periods differ on the risk side as well. The median MAE (the median of how far the unrealized loss extended at its worst after entry) was larger (more negative) near earnings, and a tendency for temporary unrealized losses after entry to be larger near earnings was observed.
Pattern B (B_10bars)
| Metric | Away from earnings | Near earnings |
|---|---|---|
| Sample size (N) | 2,309 | 656 |
| Share of trades closed in profit | 60.8% | 49.5% |
| Average P/L | +1.39% | +0.67% |
| Average loss (trades closed at a loss) | -5.38% | -4.60% |
| Profit factor | 1.66 | 1.29 |
| Largest loss | -56.0% | -36.1% |
| Longest losing streak (per stock) | 9 | 7 |
| Median MAE (maximum adverse excursion) | -3.29% | -3.79% |
| Average holding period | 10.0 trading days | 10.0 trading days |
Note: Past sample (N=2,309, N=656); not indicative of future results.
Pattern B pointed in the same direction: the share of trades closed in profit, average P/L and profit factor were all higher away from earnings. As in pattern A, the average loss and largest loss were also larger (more negative) away from earnings, while the median MAE was larger (more negative) near earnings.
Pattern C (C_stop5)
| Metric | Away from earnings | Near earnings |
|---|---|---|
| Sample size (N) | 2,597 | 726 |
| Share of trades closed in profit | 50.3% | 40.9% |
| Average P/L | +0.71% | +0.03% |
| Average loss (trades closed at a loss) | -4.36% | -4.17% |
| Profit factor | 1.33 | 1.01 |
| Largest loss | -26.2% | -32.3% |
| Longest losing streak (per stock) | 16 | 9 |
| Median MAE (maximum adverse excursion) | -3.43% | -3.87% |
| Average holding period | 7.8 trading days | 7.5 trading days |
Note: Past sample (N=2,597, N=726); not indicative of future results.
Pattern C showed the same tendency, with the share of trades closed in profit, average P/L and profit factor higher away from earnings. In pattern C, both the largest loss and the median MAE were larger (more negative) near earnings.
Observations across the 3 patterns
In all 3 exit patterns, the figures for the share of trades closed in profit, average P/L and profit factor were higher away from earnings than near earnings. Another common point was that the median MAE (the median of the largest unrealized loss during each trade) was larger (more negative) near earnings in all 3 patterns.
As for "why" these differences arose, this article touches only on what can be stated with confidence from the test conditions. Pattern A keeps holding without a stop loss until RSI returns to 50, so it is structured in a way that tends to prolong unrealized losses when a recovery is slow. Pattern B holds for a fixed 10 trading days with no stop loss, and pattern C holds for a fixed 10 trading days with a -5% stop loss. Whether differences in conditions specific to the period around earnings show up in the figures cannot be concluded from these test conditions alone. Please read these results strictly as observations.
Check your own stocks with ENTRIQ's earnings markers
On ENTRIQ's chart replay screen, markers appear automatically on earnings release dates (explained in detail in Backtesting US Stock Earnings｜Using ENTRIQ Earnings Markers).
With this feature, you can practice while checking on an actual chart how many trading days before or after earnings an RSI-below-30 signal occurred. Repeatedly reviewing context such as "this drop below RSI 30 came just before the earnings release" or "it came the day after the release" with Chart Replay gives you material for building your own criteria.
You can also use Strategy Tags to record conditions separately, such as "RSI below 30 near earnings" and "RSI below 30 away from earnings," and build them up as your own data.
Limitations and caveats
- Coverage of earnings date data: From 2008 onward only. Entries before that are not included in the earnings classification. Because there are many unclassified samples, the figures by earnings period are limited observations from 2008 onward
- Survivorship bias: Only the current index constituents are covered. Stocks that were delisted or removed from the index are not included, so the results may be skewed in a more favorable direction than reality
- Fixed conditions: Entry is at the open on the day after RSI drops below 30, and exits follow 3 fixed patterns. Results change if the stocks, period, timeframe or entry conditions change
- Minimum sample size: This backtest only covers groups with at least 30 samples
Summary
In this backtest (Dataset v2.0), RSI-below-30 signals away from earnings showed higher figures for the share of trades closed in profit, average P/L and profit factor than those near earnings, in all 3 exit patterns. It was also confirmed that the median MAE (the median of the largest unrealized loss during each trade) was larger (more negative) near earnings, consistently across the 3 patterns.
These are only aggregates of past samples. Whether the same tendencies appear in the stocks, timeframe and holding period you trade is something to check for yourself with ENTRIQ's chart replay. The basic backtest results for RSI below 30 are summarized in Daily RSI Below 30 on US Stocks｜Backtest of 3 Exits.
Frequently asked questions (FAQ)
Q. Should I avoid RSI-below-30 signals near earnings? A. This article is an observation of historical data and does not recommend any particular action. In this backtest, the figures differed from those away from earnings, but results change when the stocks, period or exit conditions change. It is important to check under your own conditions.
Q. Why is earnings date data only available from 2008 onward? A. The data used in this backtest covers 2008 onward. Entries before that could not be classified as near earnings or away from earnings. When reading the figures, keep in mind that a large share of the samples is unclassified.
Q. How do I use earnings markers in ENTRIQ? A. Markers appear automatically on earnings release dates on the chart replay screen. For details, see Backtesting US Stock Earnings｜Using ENTRIQ Earnings Markers.
Q. Why does "near earnings" use 5 trading days? A. It is one of the conditions set for this backtest. Changing the number of days changes how trades are classified. To try a number of days that interests you, the most reliable way is to check on actual charts with ENTRIQ's chart replay.
Q. Can I apply these results directly to my own trading? A. Results change when the stocks, period, timeframe or exit conditions change. Treat the figures shown as a reference and retest the conditions using your own trading parameters.
Related articles
- Complete Guide to RSI｜Reading, Settings, Entries and Testing
- Daily RSI Below 30 on US Stocks｜Backtest of 3 Exits
- Daily RSI Backtest on US Stocks by Trend｜How Results Vary
- Daily RSI Below 30 on US Stocks｜Results by Volatility Bucket
This article is provided for informational purposes to examine and organize historical data and does not recommend any specific trade. The figures shown are past samples and do not indicate future results. All investment decisions are your own responsibility.
Reproduce this validation yourself
With ENTRIQ's chart replay, you can trade through past charts using the same rules.
Try the demo — no sign-upNo sign-up or card needed. Runs right in your browser. Start 14-day free trial →
Validate your method on past charts
The same validation in this article can be reproduced with your own method. On past charts, do the classics really work?
- ✓ Replay past charts
- ✓ AI feedback on your trades
- ✓ Validate methods with statistics
No sign-up or card needed. Runs right in your browser.