Stock Screening with a 20-Day/120-Day Moving Average Filter and Capital Flow Ranking
Summary
This stock-screening proposal combines a short-versus-long trend filter, a positive price-to-earnings ratio, and a ranking by capital-flow strength. It treats a 20-day moving average above the 120-day moving average as evidence that the shorter-term trend is stronger, and uses capital inflows to prioritize stocks attracting market attention. The document later recommends net capital inflow as a more balanced measure than gross inflow alone.
It also identifies limitations: inflows can reverse, a positive P/E does not establish value and may accompany overvaluation, and a moving-average relationship can precede a pullback. Suggested refinements include assessing the persistence of valuation and combining trend measures. The final selection logic is incomplete: it repeats the factors but does not specify a complete operational ranking field or detailed implementation. No backtest, performance data, or supporting empirical evidence is provided, so the criteria are best read as a screening concept rather than a demonstrated strategy.
Key ideas
- The proposed screen ranks stocks by capital-flow strength and applies a 20-day above 120-day moving-average condition.
- It includes a positive P/E filter, while acknowledging that this alone does not establish fair value.
- Net inflow and more persistent valuation measures are suggested as refinements.
- The selection specification is incomplete and the document reports no performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.