MACD, Moving-Average Spread, and Position Growth for Stock Selection

Summary

This stock-selection screen combines three conditions: MACD above zero, upward separation of moving averages, and a daily increase in open interest greater than 5%. The article interprets the first two as signs of an upward trend and the position-growth measure as evidence of rising market interest. It outlines MACD and moving-average calculations and gives example screening logic.

The article warns that the screen omits other trading-volume measures, company fundamentals, industry, and market capitalization. It suggests adding turnover or volume measures and incorporating company and industry characteristics. The implementation examples are presented as references, and the article provides no backtest, portfolio returns, or validation of the signal. Its open-interest measure also depends on data availability and interpretation, so the stated screen alone does not establish that selected stocks are liquid or likely to outperform.

Key ideas

• The screen requires MACD above zero and upward moving-average separation.
• It also requires daily open-interest growth above 5%.
• The article recommends adding liquidity, fundamental, industry, and size filters.
• No backtest or evidence of investment performance is reported.

Tags

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