Combining Moving Average Confluence, Positive P/E, and Revenue Growth
Summary
The document describes an equity screen combining three conditions: at least five overlapping moving averages, a positive price-to-earnings ratio, and 2021 revenue divided by 2018 revenue above 1.1. The moving-average overlap is presented as a sign of steadier price behavior, while positive P/E and historical revenue growth serve as valuation and growth filters. The article repeats these criteria as its final selection logic.
It provides no backtest, sample portfolio, or evidence that the filters outperform a benchmark. It notes that moving-average overlap may exclude stocks with stronger trends, a positive P/E does not capture a company's full financial or industry context, and a three-year revenue comparison may overemphasize short-term growth. Suggested refinements include adding valuation measures such as price-to-book or dividend yield and examining profitability or market share. The stated revenue threshold is above 1.1, despite the title's less precise wording.
Key ideas
- The screen requires at least five moving averages to overlap.
- It filters for stocks with a positive price-to-earnings ratio.
- It requires 2021 revenue divided by 2018 revenue to exceed 1.1.
- The document identifies limits in relying on moving-average overlap, positive P/E, and revenue growth alone.
- No performance evidence or backtest is provided.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.