A Stock Screen Using Daily Range, the 10-Day Average, and MACD

Summary

This post describes a short-term stock selection rule built from three technical conditions: daily high-low range above one percent, opening price within two percent of the 10-day moving average, and MACD below zero two sessions earlier. It presents the combination as a way to find volatile stocks opening near their recent average after a potentially weak stretch. The post includes example implementations in a charting formula language and Python, specifying a conventional MACD configuration in the latter.

No backtest, return series, benchmark, or evidence of predictive performance is provided. The accompanying explanation suggests that the range may create opportunity and that the earlier negative MACD may indicate weakness or oversold conditions, but these interpretations are not tested in the post. It acknowledges that the conditions are narrow, may perform poorly in sideways markets, and omit fundamental information. Suggested refinements include changing thresholds, considering other moving averages, combining additional measures, and diversifying positions; these are proposals rather than demonstrated improvements.

Key ideas

• The screen combines a daily range threshold, an opening price near the 10-day average, and a negative MACD reading from two sessions earlier.
• The Python example calculates the moving average and MACD from price history before filtering stocks.
• The post offers a rationale for each condition but provides no performance test or supporting results.
• The author notes that the screen may fail in sideways markets and omits fundamental factors.
• Threshold changes, additional measures, and diversified sizing are suggested as possible refinements.

Tags

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