Screening Small-Cap Profitable Stocks with Moving-Average Convergence

Summary

This document proposes an equity screen for companies with no reported losses and market capitalization below a stated ceiling, combined with positive but limited recent price appreciation. It also looks for convergence among five moving averages spanning short to long horizons. The rationale is to select smaller companies with some positive momentum and a clustered trend profile.

The post sketches code to calculate moving averages and compare their deviations, but the implementation is incomplete and internally unclear: it mixes price-change and ten-day return language, uses data fields without explaining their source, and ends before the final selection logic is fully shown. It offers no backtest or performance evidence. The author notes that price and trend filters omit fundamental and long-term considerations, may miss candidates, and cannot ensure that selected stocks are the best investments. Suggested extensions include profitability, growth, dividends, and other indicators.

Key ideas

• The proposed screen combines a small-cap limit, absence of losses, positive recent returns, and moving-average convergence.
• Five moving averages from short to long horizons are used to characterize trend alignment.
• The code sketch is incomplete and does not clearly implement every stated condition.
• No backtest or evidence of strategy performance is provided.
• The post recommends broader fundamental and market analysis to address the screen’s limitations.

Tags

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