Intraday MACD Contraction and Seven-Day Decline Reversal Screen

Summary

This document proposes a short-term stock screen that combines a price-amplitude threshold, a shrinking negative MACD histogram on a 15-minute chart, and seven consecutive down sessions. The intended setup is a possible near-term rebound after sustained weakness, with MACD histogram contraction treated as a sign that the decline may be changing. The post gives indicator formulas and a Python sketch, but it offers no backtest, performance results, or evidence that the conditions predict reversals.

The implementation deserves caution: parts of the formulas and code do not transparently establish seven consecutive declines or consistently define the amplitude condition, and the sample MACD data handling is difficult to reconcile with a broad stock universe. The strategy is purely technical and may mistake noise for a reversal. The author suggests adding other indicators and incorporating company fundamentals, capital flows, and broader market conditions before relying on the screen.

Key ideas

• The proposed screen looks for elevated amplitude, a contracting negative MACD histogram on a 15-minute chart, and seven consecutive down sessions.
• Its rationale is that weakening downside momentum after a long decline may precede a short-term rebound.
• The supplied formulas and code do not clearly implement all stated conditions consistently.
• The post provides no predictive or backtest evidence and warns about noise and omitted fundamental and market factors.

Tags

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