Screening for Moving Average Confluence, Trend, and Revenue Growth

Summary

This stock selection proposal combines a technical trend filter with a historical revenue comparison. It seeks shares with at least five overlapping moving averages, a 20-day moving average above the 120-day moving average, and 2021 revenue more than 1.1 times 2018 revenue. The article interprets moving average confluence as price stability, the faster average above the slower one as an upward trend, and the revenue condition as evidence of company growth. It also suggests adding valuation measures or other indicators when refining the screen.

No backtest, return statistics, or sample results are provided, so the stated interpretations are hypotheses rather than demonstrated outcomes. The document does not define how close averages must be to count as overlapping, and the code excerpt is incomplete. Its revenue comparison is backward-looking and does not establish that growth will continue. These rules would need clear operational definitions, current data, and testing that accounts for market risk and the limitations of technical and financial data.

Key ideas

• The screen requires at least five moving averages to converge and the 20-day average to exceed the 120-day average.
• It also selects for 2021 revenue above 1.1 times 2018 revenue.
• The proposal combines technical trend conditions with a historical growth measure.
• The article suggests adding other indicators and valuation measures but provides no backtest evidence.
• The overlap condition is undefined, and the example code is incomplete.

Tags

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