Screening Stocks with Positive MACD, Positive P/E, and Three Falling Sessions

Summary

The document describes an equity screen requiring MACD above zero, a positive price-to-earnings ratio, and three consecutive declining sessions. Its explanation treats positive MACD as a sign of an upward trend, positive P/E as a basic valuation sanity check, and the recent decline as a possible short-term pullback that could reverse. It also gives indicator formulas and a sample workflow that filters stocks and sorts candidates by net inflow ratio.

The post cautions that three declining sessions do not establish a lasting trend or a reversal, and that short-term price conditions can distract from fundamentals. It recommends adding fundamental measures, combining multiple indicators, and diversifying. No backtest, performance evidence, or rules for position sizing and exit decisions are supplied, so the proposed reversal interpretation remains unvalidated. The sample code and formulas are references rather than evidence that the screen is profitable or robust.

Key ideas

• The screen combines MACD above zero, positive P/E, and a three-session sequence of declining prices, highs, and lows.
• The recent decline is interpreted as a possible pullback within an otherwise positive trend, not as confirmed reversal evidence.
• Candidates are sorted by net inflow ratio after applying the filters.
• The document warns that short-term indicators can mislead and recommends adding fundamental criteria and diversification.
• No performance test or complete trade-management rules are provided.

Tags

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