Combining Trading Activity, Moving Averages, and Revenue Growth for Stock Selection

Summary

This Chinese-language post outlines an equity screen that ranks stocks by capital activity, requires the 20-day moving average to exceed the 120-day average, and selects companies whose 2021 revenue is more than 1.1 times their 2018 revenue. The proposed interpretation combines investor attention, a rising short-term trend relative to the longer-term trend, and multi-year revenue growth. The article also suggests combining the three criteria to form a candidate stock list.

The discussion is conceptual rather than empirical: it presents no backtest, portfolio construction rules, transaction costs, or measured returns. It cautions that trading activity can mislead, moving-average comparisons can be affected by sentiment and short-term fluctuations, and financial statements may be revised or subject to audit adjustments. The revenue test uses fixed historical years, so its usefulness depends on the date and availability of comparable company data.

Key ideas

• The screen ranks equities by measures of trading activity such as turnover or relative volume.
• It treats a 20-day average above a 120-day average as evidence of a favorable trend.
• It selects companies whose 2021 revenue exceeds 1.1 times their 2018 revenue.
• The post proposes combining activity, trend, and revenue criteria but provides no tested performance results.
• Each input can be misleading or affected by market conditions and financial reporting changes.

Tags

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