Stock Screen Combining MACD, Daily Range, and Three-Day Price Declines

Summary

This stock-selection rule filters for a daily price range above a stated threshold, MACD crossing above zero, and three consecutive closes below their respective prior closes. The combination seeks stocks with a positive MACD condition but recent short-term price weakness. The note includes indicator definitions and sample code that sorts candidates by the MACD histogram, although the examples do not consistently implement every stated filter.

The stated rationale is to combine technical strength and volatility with a recent pullback pattern. The document offers no backtest, return figures, or evidence that this pattern identifies profitable opportunities. It warns that the rule omits company fundamentals and broader market conditions, and may select stocks that are excessively weak or pessimistically priced. It recommends incorporating fundamental and market context. Because the described signals can point in different directions, the note does not establish whether the intended use is to buy a pullback, avoid weak names, or take another action.

Key ideas

• The screen combines a daily range threshold, a MACD move above zero, and three consecutive lower closes.
• The sample code proposes ranking candidates by MACD histogram, but does not clearly apply all stated conditions consistently.
• The document gives no backtest or evidence of returns from the screen.
• It warns that fundamental information and market conditions are omitted.
• The note does not specify a clear trade entry or exit rule for the selected stocks.

Tags

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