Combining Volatility, Free Float, and Moving Average Alignment in a Stock Screen

Summary

This Chinese equity screening proposal combines three conditions: a price amplitude above 1%, free float no greater than 5.5 billion shares, and short-, medium-, and longer-term moving averages aligned upward. The article interprets the amplitude filter as selecting stocks with activity, the float limit as favoring smaller-capitalization shares, and the moving-average ordering as a positive price trend. It includes sample formula and Python approaches, including ranking qualifying stocks by turnover, but does not document a complete trading system.

The author warns that the screen ignores company finances and fundamentals, and that market-wide shifts or company-specific events can undermine its selections. Suggested improvements include adding financial measures, considering sector conditions and growth prospects, and revisiting the rules as conditions change. No historical test, benchmark, or realized return evidence is provided. The criteria therefore describe a candidate selection heuristic, with potentially elevated risk from its small-float and price-based focus, rather than a validated strategy.

Key ideas

• The screen combines an amplitude threshold, a free-float ceiling, and upward ordering of three moving averages.
• The article associates the filters with trading activity, smaller floats, and a positive price trend.
• Its sample implementations rank selected stocks by turnover, but do not provide a full trading plan.
• The screen omits fundamentals and may be affected by market conditions or company-specific events.
• No backtest or performance evidence is reported.

Tags

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