Chinese Stock Screening with Moving Average Convergence and Trend

Summary

This document outlines a Chinese equity screen that combines convergence among at least five moving averages with a 20-day average above the 120-day average. It presents the convergence as a way to identify compressed price trends and the longer-versus-shorter average condition as a trend filter. The suggested periods include several short and long lookbacks, though the document does not define how close the averages must be to count as converged.

The post offers illustrative indicator code and discusses the risks of relying on historical price patterns alone. It cautions that technical signals cannot reliably predict future prices, omit company, industry, and macroeconomic conditions, and may encourage excessive trading and costs. It recommends adapting lookback periods to market conditions and incorporating other inputs, including financial information or more complex analytical methods. No backtest results or performance evidence are provided, so the screen is a proposed selection rule rather than a validated strategy.

Key ideas

• The screen seeks stocks with at least five converging moving averages.
• It also requires the 20-day moving average to exceed the 120-day average.
• The document does not specify a tolerance for deciding when averages converge.
• Technical signals alone may miss company, industry, and broad economic conditions.
• The post provides no measured backtest performance for the proposed screen.

Tags

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