Chinese Stock Screen for Moving-Average Convergence and High Dividends

Summary

This proposed Chinese equity screen looks for prices clustered around five moving averages, then filters for a high cash-dividend-to-market-cap ratio. It compares the latest close with the 5-, 10-, 20-, 50-, and 200-day averages, sums the absolute differences, and treats a total below 50 as convergence. It also describes a dividend ratio above 25 percent, while the article’s title references a 2019 dividend measure and a 2021 period.

The document includes illustrative Python functions but no backtest, selected-stock examples, or return evidence. Important implementation details are unresolved: a fixed absolute distance threshold can behave differently across stock price levels, and the explanation of the dividend ratio and dates is not fully consistent across the text. The author notes exposure to market risk and the possibility of missing longer-term trends or company fundamentals. Suggested refinements include longer average periods, weighting averages, and adding valuation measures, but these are proposals rather than tested improvements.

Key ideas

• The screen measures convergence between the close and five moving averages from 5 to 200 days.
• It pairs that price condition with a cash-dividend-to-market-cap threshold above 25 percent.
• A summed distance below 50 is proposed as the convergence rule, though it is price-scale dependent.
• The article gives illustrative code but no backtest or performance evidence.
• It suggests longer or weighted averages and additional valuation measures for further study.

Tags

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