MACD and Rising 30-Day Average Stock Screening

Summary

The document describes a stock screen combining three technical conditions: MACD above its zero line, a rising DEA signal line, and an upward-sloping 30-day moving average. It presents these as signs of positive trend and momentum, then suggests adding valuation measures such as price-to-earnings or price-to-book ratios. The accompanying example also mentions stop-loss rules, limits on the number of holdings, and allocating portfolio value across selected stocks.

The discussion is conceptual and provides no performance results or comparison with alternative screens. Its risk section notes that technical indicators can omit useful fundamental information, may fail to capture other drivers of price moves, and do not by themselves provide adequate risk control. The code examples are not fully consistent: one moving-average condition compares the 30-day average with the prior day's value, while another compares 30-day and 60-day averages. The proposed valuation filters and portfolio controls are recommendations rather than tested improvements, so the document does not establish that they improve returns.

Key ideas

• The screen looks for MACD above zero, a rising DEA line, and an upward-moving 30-day average.
• The author treats these conditions as evidence of positive trend and momentum.
• Valuation measures such as price-to-earnings and price-to-book ratios are proposed as additional filters.
• Stop-losses and capital allocation rules are suggested to help manage risk after selection.
• The document gives no backtest results, and its code examples use differing definitions of an upward-moving average.

Tags

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