A Stock Screen Combining Daily Range, Reversal, and MACD

Summary

This document describes a stock-selection rule that combines a daily high-low range threshold, a recent reversal pattern, and a negative MACD reading from two sessions earlier. It frames range as a volatility filter, the reversal as a possible change in direction, and MACD as an additional trend condition. It also gives example implementations for a charting platform and Python-based data workflow.

The document offers no backtest, performance figures, or evidence that the filters predict returns. It acknowledges that the screen ignores company fundamentals and may reflect chance or short-lived behavior, and suggests testing additional filters and reviewing backtest results. The examples also use different reversal-pattern terminology and implementations, so their signals may not match exactly. The rule is best understood as a technical screening hypothesis that requires precise definitions, out-of-sample evaluation, and risk controls before use.

Key ideas

• The screen combines a price-range threshold, a recent reversal condition, and a lagged MACD filter.
• The proposed reversal signal is intended to identify a possible change in price direction.
• The document supplies example implementations but does not report performance testing.
• It warns that the screen omits fundamentals and may be vulnerable to chance or changing market conditions.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.