Screening Small Profitable Stocks with Positive MACD Momentum

Summary

This stock-selection screen combines four conditions: price amplitude above 1%, market capitalization at or below 10 billion, positive net profit, and MACD above the zero line. Its stated rationale is to focus on active-moving, smaller companies with positive earnings and bullish technical momentum. The document gives formula and Python examples, using a MACD calculation and filtering on its histogram as the technical check.

The note identifies substantial caveats: high-amplitude and smaller-cap stocks can be volatile, and MACD depends on timing, background conditions, and the chosen window. It recommends considering industry quality and avoiding indiscriminate momentum chasing. No backtest, portfolio rules, transaction costs, or performance evidence are supplied, so the screen is a candidate filter rather than a validated strategy. The examples may also operationalize MACD differently, making it important to confirm that the formula and data implementation match the intended zero-line condition.

Key ideas

• The screen requires price amplitude above 1%, market capitalization up to 10 billion, and positive net profit.
• It adds a MACD-above-zero condition to seek positive technical momentum.
• The note warns that small-cap and high-amplitude stocks can carry elevated volatility.
• MACD signals depend on timing, market context, and implementation choices.
• No backtest or performance evidence is presented.

Tags

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