A Stock Screen Using Daily Range, the Five-Day Average, and Returns

Summary

This stock-selection method screens for shares with an amplitude above 1, a closing price above the five-day moving average, and a daily return between -5% and 2.6%. The document presents the range as a way to find stocks with price movement and the moving-average condition as a trend filter. The return band is intended to include moderate gains and some declining stocks that may be pulling back. It provides example formulas for applying the conditions in charting software and with market data in Python.

The article gives no backtest, performance figures, or evidence that the screen identifies promising companies. It acknowledges that the rules omit company fundamentals and specify neither an entry price nor a complete trading plan. It suggests adding technical and fundamental filters and using historical prices and market conditions to plan entries. The examples may require adaptation to the data source and implementation; the screen should be treated as an initial filter rather than a validated strategy.

Key ideas

• The screen combines an amplitude threshold, price above the five-day moving average, and a bounded daily return.
• The return filter allows both moderate gains and declines within its stated range.
• The article provides example implementations in charting formulas and Python using market data.
• The rules do not include fundamentals, a defined entry price, or evidence of backtested performance.
• Additional indicators, fundamental checks, and entry planning 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.