Equity Momentum Screen Using Price Amplitude and Rising Moving Averages

Summary

This post outlines a stock screen intended to identify shares with short- and medium-term upward momentum. Its conditions combine price amplitude above one, a short moving-average relationship interpreted as upward divergence, and a 30-day moving average that is rising. The article explains these filters as measures of recent volatility and trend direction, then provides formula references and illustrative Python code.

The screen is not supported by reported backtest results. The author notes that it gives limited attention to long-term trends and company fundamentals, so it may select stocks with strong recent movement but uncertain underlying quality. Strict conditions may also exclude steadier stocks. The sample code introduces additional filters, including valuation and market capitalization, that are not part of the stated core rule; implementation details should therefore be checked before use. The post suggests broadening the assessment with other technical and fundamental measures and adjusting the selection criteria for market conditions and risk preferences.

Key ideas

• The core screen combines elevated price amplitude with short- and medium-term rising trend conditions.
• The short moving-average relationship is intended to capture near-term upward momentum.
• A rising 30-day average adds a medium-term trend filter.
• The article provides no backtest evidence and warns that fundamentals and longer-term trends are underrepresented.
• The sample code adds filters beyond the stated rule, so the implementation may not exactly match the screen.

Tags

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