Combining Limit-Up Frequency with Moving-Average Confluence for Stock Selection

Summary

This stock-selection concept combines recent limit-up activity with moving-average behavior. It proposes finding shares where at least five moving averages converge, where there was a limit-up event within the preceding 25 days, and where limit-up events occurred more than twice within the past 10 days. The rationale is that moving-average convergence may indicate a calmer or more consolidated price structure, while repeated limit-ups signal strong activity and recent upward momentum.

The document provides illustrative pseudocode, but the code does not reliably implement the stated rules: it uses streak comparisons where event counts or lookback checks are needed, and the moving-average calculation and comparisons do not establish that five averages converge. It also includes valuation filters in the code that were not part of the original three-condition screen. No performance testing is reported. The author notes that the approach omits fundamentals and may be exposed to broad market swings, suggesting valuation screens and longer horizons as possible additions. These proposals are not validated improvements.

Key ideas

• The stated screen combines five-way moving-average convergence with recent limit-up activity.
• It requires a limit-up event within 25 days and more than two such events within 10 days.
• The sample code does not consistently represent the stated event-count and convergence conditions.
• Valuation filters appear in the code although they are not part of the original screening rules.
• No backtest or performance evidence is provided, and broad market moves may affect selected stocks.

Tags

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