Stock Screening with Positive MACD, Rising Averages, and a Lower Low

Summary

The document describes a stock selection rule that combines three conditions: MACD is above zero, a short moving average is above a longer one, and the current day's low is below the prior day's low. The stated interpretation is that positive MACD and the rising average relationship indicate upward conditions, while the lower intraday low may be followed by a rebound. It also gives formula references for the indicators and an example of ranking candidates by return on equity.

The screen is presented as a starting point, not a fully specified trading system. The document warns that it omits company fundamentals and can contribute to buying high or selling low if applied mechanically; it recommends risk controls and broader fundamental analysis. No historical performance, portfolio construction, transaction costs, or validation method is reported. The example code and formulas illustrate the conditions, but the document does not establish that the signal predicts profitable returns.

Key ideas

• The screen requires MACD above zero, a short moving average above a longer one, and today's low below yesterday's low.
• The lower low is interpreted as a possible pullback before a rebound, alongside upward indicator conditions.
• The document suggests ranking screened stocks by return on equity.
• It cautions that the rule omits fundamentals and provides no performance validation.

Tags

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