Screening Stocks with a Weekly Moving Average Cross and Morning Star

Summary

This Chinese community post outlines an equity screen combining daily amplitude above 1%, a weekly five-period moving average crossing above the ten-period average, and a three-session morning star pattern. The pattern is described as a small-bodied first session in an upward trend, a small decline on the second session, and a larger bullish third session that closes above earlier candle bodies. The moving-average crossover is intended to add trend confirmation to the reversal signal.

The post gives formula descriptions and a sample Python implementation using stock data and a candlestick-pattern library. It offers no backtest, trade results, or evidence that the combined screen predicts returns. The code sample's moving averages are calculated from daily closes despite the stated weekly rule, and its amplitude condition uses a decimal threshold, so implementation details may not match the prose. The author flags sensitivity to subsequent market conditions and individual-stock volatility, and suggests testing added indicators or changing pattern thresholds.

Key ideas

• The screen combines amplitude above 1% with a weekly five-period moving average crossing above the ten-period average.
• A three-session morning star pattern is used as a possible short-term reversal signal.
• The post describes the candle pattern and supplies example formulas and code, but reports no performance evidence.
• The sample implementation may not faithfully implement the stated weekly moving-average condition.

Tags

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