Screening Stocks by Daily Range, Relative Volume, and MACD

Summary

This note presents a stock screen combining a daily price range of at least one percent, a volume ratio between 1.5 and 6, and a positive daily MACD condition. The accompanying indicator formula adds a transition check: the prior MACD is below zero while the current reading is above zero. The stated rationale is to find active stocks without unusually extreme volume, alongside a signal that may indicate a change in trend.

The article characterizes MACD as useful for trend direction but acknowledges its lag, the screen’s short-to-medium-term emphasis, and the risks posed by market expectations and trading flows. It suggests adding other technical measures, market context, and risk controls. No backtest, performance data, or empirical support is provided. The Python example uses volume divided by share count as a proxy for relative volume, which differs from the stated volume-to-five-day-average rule, so the implementation should not be assumed equivalent to the written criteria.

Key ideas

• The screen combines a daily range threshold with a bounded volume ratio and positive MACD.
• The indicator formula calls for MACD to cross from below zero to above zero.
• The article notes that MACD can lag and that the approach lacks long-term company analysis.
• No performance results are given, and the Python example measures volume differently from the stated rule.

Tags

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