Stock Screening with Range Expansion, Bollinger Bands, and Moving Averages

Summary

This document presents an equity screening rule that combines daily range expansion, Bollinger Bands, and moving-average trend direction. It selects stocks whose high-low range exceeds its recent average, whose close lies between the middle and upper Bollinger Bands, and whose shorter-term moving average is above a longer-term average. The intended reading is that elevated movement and a price in the upper half of the band accompany an established upward trend.

The post gives indicator formulas and a Python example that applies additional exclusions, including flagged stocks and a market-capitalization floor. It offers no performance results or validation. The author notes that moving averages lag, technical filters can omit fundamental or broader market information, and overly strict parameters may yield few candidates. Suggested refinements include testing parameter choices on historical data and adding other technical or fundamental inputs; these suggestions do not establish that the screen is profitable or robust.

Key ideas

• The screen requires the current high-low range to exceed its recent average range.
• It places the closing price above the Bollinger middle band and below the upper band.
• A shorter moving average above a longer one serves as the trend filter.
• The example adds exclusions and a market-capitalization threshold beyond the core indicator conditions.
• The post provides no backtest evidence, and indicator lag and parameter choices can limit the screen.

Tags

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