Combining Moving-Average Compression with Trend and Fundamental Filters

Summary

This A-share screening concept looks for stocks with at least five moving averages clustered together, low concentration, and a 20-day moving average above the 120-day average. The clustering condition seeks prices where several time horizons are close, while the longer moving-average comparison provides a trend filter. The article's proposed expanded screen adds an upward Bollinger middle band, a MACD bullish crossover, price-to-earnings below 20, and price-to-book above 1.

The article warns that technical filters can exclude fundamentally strong companies and may lose relevance when market conditions change. It suggests combining technical signals with fundamental measures. The included Python example is truncated, so it does not show a complete implementation or establish how the conditions are measured. No backtest, stock examples, or performance evidence is supplied; the rules should therefore be treated as a screening proposal, not evidence of an effective strategy.

Key ideas

• The initial screen requires at least five clustered moving averages and a 20-day average above the 120-day average.
• The article also specifies a low concentration condition, though its notation is ambiguous.
• Its expanded proposal adds an upward Bollinger middle band, a MACD bullish crossover, and valuation filters.
• The author notes that technical signals may fail when market conditions change and can omit fundamentally strong stocks.
• The code example is incomplete, and the document provides no performance evidence.

Tags

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