Combining Moving-Average Clustering with Revenue Growth Screening

Summary

This stock-screening idea looks for companies whose moving averages cluster together and whose revenue in 2021 exceeded revenue in 2018 by a ratio greater than 1.1. The article interprets clustered averages as a possible area of price support or resistance, while the revenue comparison is meant to identify businesses with growth over the period. It suggests combining the two filters with broader market and industry conditions and other technical indicators when evaluating candidates.

The document offers little evidence for the proposed interpretation and does not define how close moving averages must be to count as clustered. Its example code instead tests whether five averages are exactly equal, which is a much stricter condition and may rarely occur with real price data. The article also acknowledges risks from relying on technical patterns without adequate company, market, or industry analysis, and from a price break through the cluster. The screen is therefore an underspecified research starting point rather than a validated investment method.

Key ideas

• The screen combines clustered moving averages with a 2021-to-2018 revenue ratio above 1.1.
• Moving-average clustering is presented as a possible support or resistance area, but the document does not define a clustering tolerance.
• The code example checks exact equality among five moving averages, which may not match the broader screening description.
• The article recommends considering company fundamentals, industry conditions, and market performance.
• No performance evidence is provided, and a price break through the moving-average area may undermine the technical premise.

Tags

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