Screening Stocks with a Short- and Long-Term Moving Average Filter

Summary

This stock screen combines a daily range filter, a qualitative company-quality condition, and a trend rule requiring the 20-day moving average to exceed the 120-day average. The article interprets the moving-average relationship as evidence that recent price performance is stronger than the longer-term trend, while the range condition seeks stocks with some price movement. It provides sample formula and Python-style implementations, though the company-quality field is left as a placeholder.

The author warns that the screen omits other relevant market and fundamental information, and that moving averages can react to noise or select stocks near a peak. Suggested extensions include adding technical and fundamental measures and adjusting thresholds to market conditions and risk preferences. No historical test, performance statistics, or evidence of predictive value is supplied. The described conditions therefore form an illustrative screening recipe, not a validated trading strategy; implementation details and data definitions would need review before use.

Key ideas

• The screen selects stocks with a 20-day average above a 120-day average.
• It also uses a price-range threshold and an underspecified company-quality condition.
• Moving-average filters can be affected by noise and may identify stocks near a top.
• The article proposes combining additional technical and fundamental measures but reports no test results.

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