Combining Positive MACD with Positive Earnings for Stock Selection

Summary

This note proposes selecting stocks with MACD above zero, a favorable but undefined company-quality characteristic, and a positive price-to-earnings ratio. The rationale combines a technical trend signal with a basic profitability screen: positive MACD is treated as evidence of an upward trend, while positive PE indicates the company has earnings. The post also includes example formulas and a Python workflow that retrieves valuation and price data, calculates MACD, and filters for positive values.

The description does not define how “favorable” company quality is measured, and the stated selection rule is narrower than the Python example, which adds further valuation filters and moving-average calculations. No backtest, benchmark, or evidence of returns is reported. The author notes that the screen omits market sentiment, policy, and industry conditions, and may concentrate exposure in particular stocks or sectors. Additional technical and fundamental variables are suggested, but their effect is not tested.

Key ideas

• The proposed stock screen requires MACD above zero and a positive PE ratio.
• The rationale treats positive MACD as an uptrend signal and positive PE as evidence of earnings.
• The company-quality criterion is mentioned but not operationally defined.
• The Python example includes valuation filters beyond the stated selection rule.
• The post reports no performance test and flags concentration and omitted market factors as limitations.

Tags

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