Screening Stocks with Positive MACD, Positive PE, and Moderate Turnover

Summary

This Chinese equity-screening note selects stocks with MACD above zero, positive price-to-earnings ratio, and turnover between three and twelve percent. It interprets the MACD condition as an upward trend filter, positive PE as a basic valuation sanity check, and turnover as a way to focus on stocks with some trading activity. The note also gives example formulas and a suggested ranking by average return on equity.

No performance evidence or backtest results are reported. The author notes that a single technical indicator may miss other price information, positive PE alone says little about a company’s financial health, and turnover can be affected by macroeconomic and market conditions. The proposed refinements are to use multiple factors, adjust the turnover range for liquidity and trading costs, and consider current market conditions. The examples describe a screening recipe rather than a tested trading system, and the source code’s data-field assumptions are not validated in the document.

Key ideas

• The screen combines MACD above zero, PE above zero, and turnover in a specified range.
• The note associates positive MACD with an uptrend and turnover with liquidity, but does not substantiate those interpretations with results.
• A positive PE ratio alone does not assess overall financial health.
• The suggested ranking uses return on equity, while further refinement would include additional factors and trading costs.
• The screening rules are not accompanied by reported backtests or evidence of live performance.

Tags

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