A Stock Screen Combining High Amplitude, Two-Day Highs, and a Moving-Average Signal

Summary

This screening recipe selects stocks with daily amplitude above 1, a high equal to the highest high over the current and prior day, and a named “morning star” condition. The document defines the latter through a crossover of five- and ten-day moving averages together with price conditions relative to the five-day average. It presents the combination as a volatility and technical-pattern screen intended to identify stocks with potential reversal behavior.

The post offers indicator formulas and illustrative implementation guidance, but no backtest, performance measurements, or validation of the custom pattern. It cautions that the rules use technical and price information without adequately considering company fundamentals or broader market factors, and says the pattern’s effectiveness needs further testing. It suggests combining the screen with additional technical and fundamental measures, while noting that overly restrictive conditions could leave too few candidates. The described rules therefore provide a screening hypothesis rather than demonstrated evidence of an investable edge.

Key ideas

• The screen combines daily amplitude, a two-day high condition, and a moving-average crossover pattern.
• The named morning-star condition includes price comparisons with the five-day moving average.
• The document supplies formulas and examples but no empirical performance evidence.
• The pattern and the full screen require validation, and the technical-only approach omits fundamental and broader market information.

Tags

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