Combining Moving-Average Convergence with an Opening-Gap Stock Screen

Summary

The proposed screen selects stocks whose price is near five moving averages, that were not limit-up stocks the previous day, and whose indicated price at 9:25 is less than 6% above the prior close. The article suggests that clustered averages may represent a relatively quiet price phase, while excluding a prior limit-up may avoid already extended stocks. The opening-price constraint is intended to limit large overnight moves. It outlines these conditions conceptually and includes only a partial code reference.

The document provides no backtest, sample period, or measured evidence that these filters identify promising trades. It also leaves key implementation details unclear, including the five averaging periods and the tolerance used to define convergence. The supplied code fragment is incomplete, so it cannot establish how the conditions would be calculated in practice. The article acknowledges that average convergence can accompany weak movement and that neither a non-limit-up day nor a modest indicated opening gain guarantees investment value. It suggests adjusting average periods and adding price, volume, or fundamental checks.

Key ideas

• The screen combines proximity to five moving averages, a prior-day non-limit-up condition, and a capped 9:25 indicated gain.
• Moving-average convergence is interpreted as a possible period of relative price stability.
• The article does not specify the averaging periods or the threshold for deciding that averages are close.
• The code is incomplete, and the document reports no evidence of strategy performance.

Tags

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