Stock Screening with Price Amplitude, Weekly MACD, and Chart Patterns

Summary

This document outlines a stock selection approach using daily price amplitude above 1, a positive weekly MACD histogram, and an arc-shaped price pattern. It interprets the amplitude condition as a volatility filter, the weekly indicator as evidence of upward movement, and the arc formation as a possible reversal pattern. Example formulas and partial Python logic are included to illustrate filtering securities and detecting the pattern.

The article also proposes broadening the screen with other chart formations, fundamental information, industry trends, or automated pattern recognition. However, it does not report a backtest or empirical evidence that these conditions produce profitable selections. It acknowledges that chart-pattern identification is subjective and that the original rules omit fundamentals and industry context. The sample code uses a daily MACD check even though the stated screen calls for a weekly histogram, so implementations may not match the written criteria without adjustment.

Key ideas

• The proposed screen combines amplitude above 1, positive weekly MACD, and an arc-shaped chart pattern.\nThe document interprets the pattern as a possible upward reversal, rather than a confirmed signal.\nIt suggests adding other patterns, fundamentals, and industry information to broaden the screen.\nAutomated pattern detection is proposed as a way to reduce subjective interpretation.\nNo performance test is supplied, and the code’s daily MACD check differs from the stated weekly condition.

Tags

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