Stock Screening for Volatility, Rounded Price Patterns, and Recent Surges

Summary

This stock-selection rule combines elevated amplitude, a rounded price pattern, and at least one daily gain of 10% or more during the preceding 25 trading days. The accompanying formula adds more precise conditions: it checks recent highs and lows, requires price to be above its 20-day average by a margin, and requires it to exceed its 60-day average by another margin. The text presents the screen as a way to find stocks with movement and a recent strong advance.

The article cautions that recent surges may capture short-lived hot stocks and that technical filters do not assess fundamentals. It recommends reviewing historical backtests and combining the technical screen with fundamental and market-context information; machine learning is also suggested as a possible refinement. No backtest results or evidence that these changes improve returns are provided, and the Python implementation is listed as forthcoming.

Key ideas

• The screen combines amplitude above one, a rounded pattern, and a qualifying daily surge in the prior 25 trading days.
• Its formula also applies price checks relative to the 20-day and 60-day moving averages.
• The article warns that recent large gains can select short-lived market favorites.
• It recommends testing the rule and considering fundamental and market conditions, but reports no results.

Tags

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