Stock Screening with Turnover, Engulfing Reversals, and Rising DEA

Summary

This note describes an equity screen that combines a 3%–12% turnover range, an engulfing-style reversal condition, and a rising DEA value from the MACD indicator. Its stated selection logic ranks qualifying stocks by market capitalization. The article also provides example formula and Python implementations, though the Python example uses futures settlement data as a proxy for its reversal condition, so the implementation does not clearly match the described stock signal.

The note warns that technical indicators alone do not assess company fundamentals and that a rising DEA does not establish future price direction. It suggests adding indicators such as RSI and fundamental measures such as valuation, earnings, and industry trends. No backtest, performance results, or evidence of predictive value are reported, so the screen is best understood as a candidate-selection rule requiring independent validation.

Key ideas

• The screen selects stocks with turnover between 3% and 12%, a reversal pattern, and a rising DEA indicator.
• The described formula orders qualifying stocks by market capitalization.
• The note cautions that DEA movement alone may misrepresent a stock’s prospects.
• It recommends combining technical conditions with fundamentals and additional indicators.
• The article gives no performance analysis, and its Python example’s reversal proxy may not match the stated signal.

Tags

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