Combining MACD, Market Heat, and a Weekly Moving Average for Stock Selection

Summary

This stock-screening approach selects securities with MACD above zero and a weekly close crossing above its 30-week moving average, then ranks candidates by market attention or heat. It runs after each trading day’s close. The stated rationale is to pair a positive shorter-term momentum signal with a longer-term trend filter, using attention as a ranking criterion.

The document gives indicator formulas and illustrative screening code, but reports no backtest, returns, or evidence that the filters improve outcomes. Its own caveats include ignoring company fundamentals and broad market conditions, potentially concentrating selections, and entering after a substantial part of a rise has already occurred. It suggests adding other fundamental, technical, and macroeconomic filters, though it does not evaluate those changes. Market heat is not operationally defined in the supplied material, so reproducing the ranking requires an external definition or data source.

Key ideas

• The screen requires MACD to be positive and the weekly close to cross above its 30-week moving average.
• Candidates are ranked by stock heat, and selection is performed after the daily close.
• The combination is intended to capture positive momentum and a longer-term uptrend.
• The document provides formulas and sample code but no performance testing or measured results.
• The screen may neglect fundamentals and market context, concentrate holdings, or select stocks after much of a rally.

Tags

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