Stock Screening with Moving Average Crossovers and a Prior Limit-Down Signal

Summary

The post describes a stock screen that combines a price-amplitude condition, simultaneous upward crosses among three moving averages, and a prior-day 9:15 matching-price limit-down condition. It presents the limit-down observation as a possible filter against stocks that had shown extreme speculative behavior, and suggests checking closing prices and other factors to validate candidates. The intended approach is a technical screen with an unusual prior-session price event, rather than a fully specified trading system.

The article provides formula and Python sketches, but important details are unclear: moving-average periods are left as variables, the code compares averages rather than explicitly detecting fresh crosses, and the limit-down calculation is not clearly implemented by the example. It acknowledges that a limit-down stock may rebound, so this filter could exclude potential opportunities. No historical performance, risk metrics, or evidence that the conditions improve selection is supplied. The screen therefore needs precise data definitions and rigorous testing before its usefulness can be judged.

Key ideas

• The proposed screen combines price amplitude, three moving-average crossovers, and a prior-day opening match at the limit-down price.
• The moving-average periods and several operational definitions are unspecified.
• The code sketch does not clearly implement all the stated crossover and limit-down conditions.
• A prior limit-down event may precede a rebound, creating a risk of excluding candidates.
• The post provides no backtest results or evidence of improved returns.

Tags

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