Combining Turnover, Reversal Candles, and a Weekly Moving-Average Crossover

Summary

This stock-selection method filters for shares with turnover between 3% and 12%, a reversal-style candlestick condition, and a weekly five-period moving average crossing above the ten-period average. The article presents the combination as a way to pair trading activity and a short-term price pattern with a moving-average trend signal. Its sample code estimates the reversal condition from daily price ranges and checks for the weekly crossover against the prior observation.

The author warns that short-term indicators can be noisy and suggests considering volume, other technical measures, and company fundamentals. The material includes sample formulas and Python code, but no backtest results or evidence that the combined screen predicts returns. The example also relies on a particular date and data provider, so it does not establish how the method performs across different periods, markets, or execution assumptions.

Key ideas

• The screen requires turnover between 3% and 12% and a reversal-style candle condition.
• It selects stocks when the weekly five-period average crosses above the ten-period average.
• The sample calculates the crossover using the current and prior weekly averages.
• The article cautions that short-term signals may be noisy and proposes broader inputs.
• No performance results or validation across market conditions are provided.

Tags

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