Screening Chinese Stocks by Moving Average Confluence, Turnover, and Dividends

Summary

This proposed Chinese equity screen combines price stability, trading activity, and dividend history. It looks for stocks whose 5-, 10-, 20-, 60-, and 120-day moving averages converge, yesterday’s turnover exceeds 8%, and the 2019 dividend payout ratio is above 25%. The post suggests that clustered averages indicate lower volatility, while high turnover signals market activity and a substantial payout indicates dividend capacity.

The article later proposes adding profitability, valuation, moving-average, and MACD filters, but these additions are not specified consistently. Its sample scoring code averages the five moving-average price levels and adds weighted turnover and dividend-ratio values; it does not directly encode the stated convergence test or the proposed profitability and valuation screens. No backtest results or return evidence are supplied. The author notes that volatility, turnover, and dividend capacity can change, so the screen requires reassessment and carries equity-market risk.

Key ideas

• The screen selects stocks with five moving averages clustered around one another.
• It adds a prior-day turnover threshold above 8% and a 2019 dividend payout ratio above 25%.
• The rationale is to combine price stability, trading activity, and dividend characteristics.
• The suggested additions include profitability, valuation measures, and MACD, but their implementation is unclear.
• The sample score does not directly implement the described moving-average convergence condition, and no performance evidence is given.

Tags

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