Screening Stocks by Moving-Average Convergence, Range, and 10-Day Gains

Summary

This note proposes screening stocks for daily amplitude above 1%, at least five converging moving averages, and a positive 10-day return below 35%. It frames the return band as a way to focus on shares with recent gains, while moving-average convergence and trading range describe price structure and activity. The article includes a formula sketch and a Python example, but the example defines only three moving averages and uses a count of distinct values, which does not clearly implement the stated requirement of at least five overlapping averages.

No backtest, sample, or performance evidence is provided. The author notes that a technical screen may favor speculative stocks and omit business quality and governance. Suggested extensions include market-capitalization filters, additional indicators such as RSI or MACD, and adapting the selection to market conditions; these are proposals rather than validated improvements.

Key ideas

• The proposed screen requires amplitude above 1%, at least five overlapping moving averages, and a positive 10-day return below 35%.
• The return filter is intended to favor stocks with recent gains while excluding stronger advances beyond the stated cap.
• The code example does not clearly implement the five-average overlap condition.
• The article cautions that price-based filters can miss fundamentals and governance risks.
• Market capitalization and other indicators are suggested as possible additions, without supporting test results.

Tags

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