Combining Positive MACD, Earnings, and a Rounded Price-Recovery Pattern

Summary

This proposed equity screen selects stocks with MACD above zero, positive net profit, and a rounded price-recovery pattern. The document interprets positive MACD as evidence of an upward trend, profitability as a basic quality check, and the rounded shape as a possible sign that prices have stabilized and begun to rebound. It provides an indicator formula and a sample implementation that calculates MACD and a rolling price-position measure as a proxy for the shape.

No backtest, comparison, or return evidence is presented, so the claimed low-risk or high-return potential is not established. The rounded-pattern proxy is an approximation, and the article itself notes that chart-pattern identification may be wrong and that company fundamentals can change. It suggests adding other reversal shapes and financial measures such as earnings growth or valuation ratios, but does not test those additions. The screen is therefore a rule proposal, not validated investment evidence.

Key ideas

• The screen combines MACD above zero, positive net profit, and a rounded recovery pattern.
• The rationale pairs a trend signal with profitability and a chart-based rebound hypothesis.
• The example code approximates the rounded pattern with a rolling price-position measure.
• The document reports no tests or performance results validating the screen.
• Pattern misclassification and changing fundamentals are identified as risks.

Tags

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