A Stock Screen Combining Moving Average Convergence, Turnover, and Dividends

Summary

This stock-screening proposal selects equities whose 5-, 10-, 20-, 30-, and 60-day moving averages converge, with turnover above 2% and below 9%, and a dividend payout ratio above 25% for 2019. The author interprets clustered short- and medium-term averages as a sign of trend stability, uses the turnover band as a liquidity filter, and treats a high payout ratio as evidence of shareholder distributions. The screen is described for use with a natural-language stock selection platform and its backtesting template.

The document offers a rationale for the filters but no backtest results, comparison group, or evidence that they predict returns. It cautions that stable moving averages do not establish long-term performance, a moderate turnover rate does not guarantee liquidity, and a high payout ratio does not prove profitability. The criteria are therefore a screening hypothesis, and the author recommends considering financial and other measures alongside them.

Key ideas

• The proposed screen requires five moving averages to converge on a stock chart.
• It filters turnover to a band above 2% and below 9%.
• It adds a historical dividend payout criterion above 25% for 2019.
• The document gives a rationale for the filters but reports no performance evidence.
• It warns that these criteria alone do not establish liquidity, profitability, or long-term returns.

Tags

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