Chinese Stock Screening with KDJ and Weekly Moving Average Crossovers

Summary

This stock selection method combines a daily price range filter with two technical crossover signals. It selects stocks whose high-to-low range exceeds one percent, where the KDJ J line has just crossed above its D line, and where the weekly five-period moving average has just crossed above the ten-period average. The document provides example formulas and Python-style logic for calculating the conditions; it does not report backtest results or evidence that the signals produce profitable trades.

The author interprets the range as a volatility screen, the KDJ crossover as a possible improvement in market sentiment, and the weekly moving average crossover as an indication of an upward trend. The method omits company fundamentals and broader market context, and its reliance on a small set of technical signals may lead to mistaken selections. Suggested refinements include adding valuation and balance sheet measures, considering other indicators, and reviewing the selection universe regularly. The document also flags risks associated with volatile and specially treated stocks.

Key ideas

• The screen requires a daily high-to-low range greater than one percent.
• It looks for a newly formed bullish KDJ crossover.
• It also requires the weekly five-period average to cross above the ten-period average.
• The article presents the combined rules as a watchlist filter rather than evidence of a tested profitable strategy.
• Fundamental risks, other market signals, and specially treated stocks are not adequately addressed by the rules.

Tags

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