Screening for Moving Average Clusters with a Bullish Short-Term Trend

Summary

This Chinese equity screen looks for stocks whose 5-, 10-, 20-, 60-, and 120-day moving averages cluster closely together. It proposes ranking stocks by the degree of overlap and then retaining those with the 20-day average above the 120-day average. The clustered averages are intended to indicate a relatively stable price structure, while the short average above the long average is treated as a positive short-term trend condition.

The article describes the rationale and possible refinements, such as adding other moving-average periods, valuation or volume measures, and a stop level. It provides only a partial Python example, with the code cut off before the calculation or ranking method is complete. There are no backtest results or performance statistics. The stated limitations are that moving-average patterns can be affected by market sentiment and sudden events, and complex average configurations may be difficult to interpret reliably.

Key ideas

• The screen seeks overlap among the 5-, 10-, 20-, 60-, and 120-day moving averages.
• Candidates are ranked by the degree of moving-average clustering.
• The final filter requires the 20-day average to exceed the 120-day average.
• The article suggests adding valuation, volume, or stop criteria but gives no tested results.
• Its code example is incomplete, and the method may miss abrupt market changes.

Tags

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