Stock Screening with Moving Average Alignment and an Opening Price Cap

Summary

This post proposes a technical screen combining five moving averages, an opening-period price-change filter, and a medium- versus long-term trend condition. It suggests using the 5-, 10-, 20-, 60-, and 120-day averages, requiring at least five averages to converge, limiting the stated 9:25 price rise to below 6%, and requiring the 20-day average to exceed the 120-day average.

The rationale is that converging averages may indicate a stable price structure, while the moving-average relationship is intended to identify an upward trend. The post offers no backtest, performance figures, or empirical support for these interpretations. It acknowledges that price and moving-average analysis omits company fundamentals and other influences, and that the screen can miss stocks. It suggests adding financial statement analysis and valuation measures, but does not specify how to define convergence, combine additional factors, or validate the resulting rule.

Key ideas

• The proposed screen combines five moving averages with an opening price-change limit.
• It requires the 20-day moving average to be above the 120-day average.
• The post interprets close moving averages as a sign of stable price structure.
• It reports no empirical test or performance evidence for the screen.
• The author suggests adding fundamental and valuation measures to broaden the analysis.

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