Screening Stocks with Positive MACD, Rising Averages, and Limited Gains

Summary

This short-term stock screen selects shares when MACD is above zero, short-term moving averages are rising or spreading upward, and the latest price change lies between -5% and 2.6%. The article describes the conditions as a way to combine price trend signals with a bounded daily move, and supplies indicator formulas and a Python example. The sample code checks whether the MACD difference is positive, whether the five-day average exceeds the ten-day average, and whether the daily return falls within the stated interval.

The article characterizes short-term selection as risky and notes that price changes can reflect special events whose causes the filters do not account for. It suggests adding other technical and fundamental measures, but reports no backtest, return statistics, or validation procedure. The written description also does not fully specify what upward average divergence means, while the code uses a simple moving-average ordering as a proxy. The rule should therefore be treated as an illustrative screen requiring precise implementation and independent testing.

Key ideas

• The screen requires MACD above zero, upward short-term moving-average alignment, and a daily return from -5% to 2.6%.
• The sample implementation uses the five-day average above the ten-day average to represent upward average alignment.
• The article supplies indicator formulas and example screening code but no measured performance evidence.
• Daily price changes may reflect company events that the screen does not identify.
• Short-term signals can be sensitive to market moves, and the rule needs precise definition and testing.

Tags

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