Combining MACD, Moving-Average Expansion, and Earnings Growth

Summary

This stock-selection method combines a positive MACD reading, upward expansion or alignment of short moving averages, and year-over-year growth in net profit attributable to parent-company shareholders between 20% and 100%. The intended logic mixes trend signals with an earnings-growth filter: MACD and moving averages are used to identify technical strength, while the financial condition seeks companies with rising profits. Formula and Python examples show calculations for MACD, five- and ten-session averages, and trailing net profit growth, but the code’s conditions do not fully clarify the stated moving-average expansion rule.

The article warns that technical and financial indicators can miss valuation, balance-sheet, accounting, and policy factors. It suggests adding valuation and asset-quality measures and adopting risk controls. It provides no backtest, benchmark, or return evidence, so the proposed combination should be treated as a screening idea rather than a demonstrated strategy. Profit growth can also be distorted by the comparison period or reporting choices, and the document does not specify entry, exit, or position-sizing rules.

Key ideas

• The screen combines MACD above zero with an upward-moving-average condition and parent-attributable net-profit growth from 20% to 100% year over year.
• The approach combines price-trend indicators with a fundamental earnings measure.
• The examples calculate MACD and short moving averages, but the moving-average condition is not fully defined.
• The author notes risks from valuation, asset structure, accounting choices, and policy effects.
• No backtest or performance evidence is given, and portfolio and exit rules are unspecified.

Tags

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