Screening Chinese Stocks with MACD, Rising Averages, and Dividends

Summary

This note outlines a Chinese equity screen combining a positive MACD reading, upward-diverging moving averages, and a dividend payout ratio above 25% in 2019. It gives formulas for MACD and a five-day moving average, then sketches a Python workflow that filters dividend data and price history before applying indicator conditions. The stated rationale is to find stocks with upward momentum and a record of distributing profits to shareholders.

The article warns that relying on one year's payout ratio can create cyclical selection bias, may favor large-cap stocks over smaller innovators, and can screen out firms with greater future growth potential. It suggests checking multiple years of dividends and combining the payout screen with valuation or profitability measures such as PE, PB, or ROE. No backtest, performance results, or detailed definition of the average-line divergence condition is provided, so the screen should be treated as a selection sketch rather than a validated strategy.

Key ideas

• The screen combines MACD above zero with upward-diverging moving averages and a 2019 dividend payout ratio above 25%.
• The Python example calculates MACD from exponential moving averages and compares the current five-day average with its prior value.
• The author cautions that a single year's dividend data can skew selection and miss growth companies.
• The note recommends multi-year dividend history and additional valuation or profitability measures.

Tags

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