Chinese Stock Screening with MACD, Rising Averages, and Institutional Buying

Summary

This note proposes a Chinese stock selection screen requiring MACD’s DIF line to be above zero, a short moving average to be rising, and positive institutional net buying. It interprets these conditions as evidence of an upward trend and institutional interest. The example calculates MACD using exponential averages with spans of 12, 26, and 9, and uses a five-period simple moving average whose current value exceeds its prior value. The institutional condition is represented by positive net buying data.

The author cautions that institutional purchases do not guarantee future gains and may reflect only short-term views. Suggested refinements include adding technical and fundamental filters and investigating the reasons, amounts, and proportions behind institutional buying. The document gives illustrative indicator logic but no backtest, return statistics, or proof that the combined signal is predictive. Its practical usefulness depends on consistent data definitions and access to reliable institutional-flow data.

Key ideas

• The proposed screen combines MACD DIF above zero, a rising five-period moving average, and positive institutional net buying.
• The indicators are intended to identify upward price momentum alongside institutional demand.
• The example defines a rising average as its current value exceeding its prior value.
• Institutional purchases can precede volatility or further declines and do not ensure appreciation.
• The note offers no performance testing and relies on the quality of institutional-flow data.

Tags

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