Filtering Stocks by Price Range and Moving Average Crossovers

Summary

The document outlines a stock screen that combines a price movement filter with a low closing-price threshold and simultaneous bullish crossovers among three moving averages. It presents the idea as a way to find stocks that may be starting an upward move, and includes example implementations in a charting formula and Python. The examples use 10, 20, and 60 period averages; the Python version also calculates amplitude relative to the previous close.

The author cautions that technical signals can misread market conditions and omit fundamental risks. Suggested refinements include adding indicators such as MACD and considering company fundamentals. The document provides no backtest, performance evidence, precise definition of the three technical indicators in its initial description, or trading rules for entries, exits, and risk management. Its sample formula and Python logic also differ in their amplitude calculations and crossover conditions, so they should not be assumed to implement an identical screen.

Key ideas

• The screen combines an amplitude threshold and a closing-price ceiling with bullish moving-average signals.
• The examples use 10, 20, and 60 period moving averages.
• The suggested approach is intended to identify stocks that may be beginning an upward move.
• Technical filters can overlook fundamental risks and produce misleading signals.
• The document recommends considering additional indicators and company fundamentals, but gives no performance testing.

Tags

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