MACD, Moving-Average Expansion, and Two-Day High Stock Screening

Summary

The document presents a Chinese A-share screening idea that combines a positive MACD reading, upward separation of short moving averages, and a session high matching the highest level over the prior two days. It explains these conditions as signals of improving price direction and recent strength. The accompanying example outlines MACD and moving-average calculations and adds a proposed fundamental filter based on profit growth, though it does not provide measured performance or a complete, validated implementation.

The author warns that technical signals omit company fundamentals and can select stocks after sharp short-term gains. Suggested refinements include reviewing financial and industry information, incorporating a longer-term trend measure, and limiting concentration. The article’s code and formulas are reference material rather than evidence of profitability; it gives no backtest results, transaction-cost analysis, or precise rules for portfolio construction and exits. Its final recommendation to combine technical screening with fundamental review is broader than the initial mechanical signal.

Key ideas

• A positive MACD reading is combined with upward movement in short moving averages as a trend filter.
• The price must reach a two-day high to qualify under the proposed screen.
• The example suggests adding a fundamental filter, such as positive profit growth, but does not validate it.
• The author cautions that technical indicators can select overextended stocks and omit business risks.
• Longer-term trend checks and diversification are suggested as possible risk controls.

Tags

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