Screening Stocks with Price Amplitude, Stochastic Strength, and MACD

Summary

This stock screen combines a price-amplitude threshold, a low K-line reading described as an oversold condition, and MACD above its zero line. The stated rationale is to find active stocks that may be oversold while retaining an indicator associated with an upward trend. The article also suggests adding valuation or other fundamental measures, adjusting the stock universe and indicator settings, and evaluating the screen through backtesting and live monitoring.

The article provides formula and Python examples, but their implementation is inconsistent with the written rules. The formula uses a MACD zero crossing and does not clearly encode the K-line threshold; the Python example uses a lagged percentage-change condition instead. No historical test results or evidence of profitability are reported. The author cautions that technical conditions may stop working as markets change and that requiring positive MACD may exclude deeply oversold stocks during rapid declines.

Key ideas

• The stated screen pairs price amplitude above one with a K-line value below 20 and MACD above zero.
• The rationale combines an oversold reading with a trend filter.
• The supplied formula and Python example do not consistently implement all three stated conditions.
• The proposal has no reported performance test and may behave poorly during rapid declines or changing market regimes.

Tags

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