Screening Low-Priced Stocks for Moving-Average Convergence

Summary

This note proposes selecting stocks priced below 12 yuan whose moving averages converge, with a reference to screening for at least five overlapping averages. It presents convergence as a possible sign that short- and medium-term trends are aligned. Its proposed refinements add 10-, 20-, and 60-day averages and valuation filters requiring price-to-earnings below 20 and price-to-book below 2.

The document offers sample filtering code and general cautions that historical price patterns cannot reliably predict future performance and volatile stocks can still cause losses. However, the code checks whether price is above three moving averages rather than whether five averages converge, and it does not implement the stated 2021 date condition. No backtest or supporting evidence is supplied. The strategy therefore remains an incomplete screening sketch, with ambiguous convergence criteria and valuation filters that would need point-in-time data and testing.

Key ideas

• The proposed screen targets stocks under 12 yuan with at least five converging moving averages.
• The note treats convergence as a possible indication of aligned short- and medium-term trends.
• Suggested additions include selected moving averages and low price-to-earnings and price-to-book ratios.
• The sample code does not implement the stated five-average convergence or 2021 condition, and no performance evidence is offered.

Tags

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