A Stock Screen for Large Daily Declines and Negative MACD

Summary

The document presents an equity screening rule combining three conditions: amplitude above one, a daily maximum decline between four and five percent, and a MACD value below zero two sessions earlier. It frames the screen as a way to find volatile stocks that have recently weakened, potentially offering a lower entry price. It also includes illustrative indicator logic and a Python example for retrieving stock data and checking conditions.

The material does not provide a backtest, performance figures, benchmark, or clear operational definition for the amplitude and daily maximum-decline fields. Its explanation treats the prior negative MACD as evidence of a recent decline, but MACD is lagging and does not predict a rebound by itself. The document acknowledges risks from volatility, technical-only selection, and absent fundamental analysis, and suggests adding other signals and stop-loss rules. It gives no exit, sizing, portfolio, liquidity, or transaction-cost rules, so the screen alone does not establish a complete or validated strategy.

Key ideas

• The screen selects stocks with amplitude above one, a daily maximum decline between four and five percent, and a negative MACD reading two days earlier.
• The stated rationale is to identify volatile shares that have recently weakened.
• The document notes that MACD lags and that volatile shares can carry elevated trading risk.
• It recommends considering additional technical or fundamental filters and risk controls, but supplies no backtest evidence.

Tags

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