Screening for Reversals with Intraday MACD and Price Patterns

Summary

This stock-screening idea combines amplitude above 1, a shortening negative MACD histogram on a 15-minute interval, and an engulfing-style reversal pattern. The article interprets the amplitude filter as a way to find volatile shares and the shrinking histogram as a possible sign that a move is changing. It presents the pattern as a possible shift in the balance between buyers and sellers. Formula and Python examples are included to illustrate screening, but the implementations use different price-pattern definitions and do not consistently establish that all conditions occur together on the same observation.

The article warns that apparent reversals may fail and that candidates could be value traps. It suggests adjusting filters by industry and market capitalization and considering valuation. These are conceptual suggestions rather than tested improvements: no backtest, measured outcomes, or evidence of predictive performance is supplied. The screen is therefore a speculative signal recipe whose thresholds and pattern definitions would need careful validation.

Key ideas

• The proposed screen combines amplitude above 1, a shortening negative 15-minute MACD histogram, and a reversal pattern.
• The conditions are presented as clues to volatility and a possible early trend change.
• The formula and Python examples use differing definitions of the reversal pattern.
• The article cautions that apparent reversals can fail and candidates may be value traps.
• No backtest or measured evidence supports the signal's predictive value.

Tags

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