Screening Chinese Equities with MACD, Positive P/E, and Price Above the Five-Day Average

Summary

This stock-screening proposal combines three conditions: MACD above zero, positive trailing price-to-earnings ratio, and closing price above its five-day moving average. The accompanying rationale treats positive MACD as a sign of an upward trend, positive P/E as a normal valuation reading, and price above the short average as evidence of relative strength. It also provides reference indicator formulas and describes sorting qualifying stocks by percentage change.

The document characterizes the screen as simple and says it may omit other influences on prices or select too few stocks. It suggests adding indicators such as RSI or Bollinger Bands, adjusting conditions for market or industry context, or incorporating fundamental measures such as PEG. No backtest, universe definition, rebalance schedule, transaction costs, or return and risk statistics are supplied, so the rules should be treated as a screening concept rather than a validated strategy.

Key ideas

• The screen requires positive MACD, positive P/E, and a closing price above its five-day average.
• The rules combine a trend indicator, a valuation filter, and a short-term price-strength condition.
• The article suggests adding technical or fundamental filters and adjusting for market context.
• It gives no backtest or evidence about the screen’s returns or risk.

Tags

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