Stock Screening with MACD, Rising Moving Averages, and Concentration

Summary

The document presents an equity screening rule that selects stocks with MACD above zero, upward-spreading moving averages, and a concentration measure greater than 70%. It describes the MACD condition as a sign of an upward market state and the moving-average condition as an indication of an upward trend. It also provides example indicator formulas, a screening expression, and a volume-based ranking rule. A Python example shows querying stock data and sorting candidates by trading volume.

The post flags risks associated with high concentration, including greater price swings, excessive concentration in a portfolio, and possible information asymmetry. It suggests combining the screen with financial measures, market capitalization, or turnover, and reviewing the strategy over time. However, it gives no backtest results or validation of the proposed interpretations, and does not define the concentration inputs in enough detail to assess their reliability. The screening conditions are an idea to evaluate, not evidence of an effective strategy.

Key ideas

• The screen combines positive MACD, rising moving averages, and a concentration threshold above 70%.
• The example ranks qualifying stocks by trading volume.
• The post warns that high concentration may accompany volatility and concentrated exposure.
• It suggests adding financial and trading characteristics when refining the screen.
• No backtest evidence is provided to establish that the rules are profitable.

Tags

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