Equity Screening with Moving Average Convergence and Turnover

Summary

This stock screen combines three conditions: at least five moving averages converge, the previous session’s turnover exceeds 8%, and the 20-day moving average is above the 120-day average. The article interprets clustered averages as a sign of price consolidation near potential support or resistance, high turnover as evidence of active trading, and the moving-average relationship as an upward short-term trend relative to the longer trend. It presents this as a way to identify liquid stocks with a potentially constructive price setup.

The article offers qualitative reasoning rather than performance data, a defined trading or exit rule, or a backtest. It cautions that market sentiment, company results, and sudden price moves can undermine the screen. It suggests adding indicators such as MACD or RSI and adjusting the moving-average conditions, but provides no evidence that these changes improve results. The accompanying code excerpt is incomplete and does not establish a complete, reproducible strategy.

Key ideas

• The screen requires at least five converging moving averages and previous-session turnover above 8%.
• It also requires the 20-day moving average to exceed the 120-day average.
• The article treats moving-average convergence as possible consolidation around support or resistance.
• It provides qualitative rationale and risks, but no backtest or performance evidence.
• Additional indicators are suggested as possible refinements without demonstrated results.

Tags

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