Stock Screening with Moving Average Alignment and Price Filters

Summary

This stock selection approach combines three chart conditions: price amplitude above a threshold, at least five moving averages overlapping, and the 20 day moving average above the 120 day average. The longer average comparison is presented as a way to favor stocks in an established upward trend, while amplitude and moving average convergence constrain the price patterns admitted to the screen. The document also sketches a Python workflow for applying related filters to a stock universe.

The screen is described as a candidate selection method, not a tested trading system. The article warns that strict price pattern requirements may exclude downtrends and reversals, and that technical filters can narrow the opportunity set. It suggests adding indicators such as RSI or MACD and reconsidering the moving average and volatility criteria. The code excerpt contains apparent inconsistencies between the stated conditions and its calculations, so the implementation details should be checked before use; no backtest results are supplied.

Key ideas

• The screen requires amplitude above a threshold, five or more overlapping moving averages, and the 20 day average above the 120 day average.
• The long and short average relationship is intended to select stocks with an upward trend.
• The document cautions that restrictive price filters can miss reversals and reduce the candidate pool.
• It suggests supplementing price patterns with other indicators or adjusting the filter definitions.
• The code example is not accompanied by performance evidence and should be checked against the stated rules.

Tags

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