Combining Moving-Average Compression, Recent Gains, and Revenue Growth

Summary

This stock screen combines three conditions: at least five moving averages coincide, the stock’s ten-day return is positive but below 35, and revenue in 2021 divided by revenue in 2018 exceeds 1.1. The note explains the moving averages using 5-, 10-, 20-, 30-, and 60-day windows, treating their convergence as relatively stable price action. It describes the return filter as moderate recent appreciation and the revenue ratio as evidence of business growth.

The author notes that moving-average convergence takes time to form and can break during sharp price moves. Suggested extensions include longer moving averages, MACD, RSI, and further filters. The final selection logic also mentions MACD and RSI thresholds, though these are not part of the initial three-condition description. Code examples are supplied, but contain apparent logic and syntax problems; the note reports no backtest, sample, or evidence that the screen has predictive value.

Key ideas

• The proposed screen combines converging moving averages, a bounded ten-day gain, and revenue growth between 2018 and 2021.
• The moving-average condition uses 5-, 10-, 20-, 30-, and 60-day windows.
• The final logic adds MACD and RSI conditions beyond the initial three filters.
• Moving-average convergence can lag and may disappear during sharp price moves.
• The provided code has apparent inconsistencies, and no performance results are reported.

Tags

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