Two-Year High Pullback Strategy with 13- and 21-Day EMAs

Summary

This stock strategy looks for pullbacks after a price reaches a two-year high. Its stated entry conditions place the price within 10% of the prior 504-bar high, with the bar’s low at or below the 13-day EMA and at or above the 21-day EMA. The source code uses these conditions for a long entry; it does not require a new high on the entry bar. Positions are intended to exit when price falls 5% below the 21-day EMA or 20% below the prior high, with a date-based close also present in the code.

The document describes the setup as a long-term breakout idea and suggests adding market context or volume filters and adjusting the moving-average parameters. It provides no performance results. Its explanation and implementation are not fully aligned: the overview emphasizes a touch of the 13-day EMA, while the code’s entry test uses the bar’s low relative to both averages. The stop logic and date condition also merit careful review before testing, and gap risk and false signals remain acknowledged limitations.

Key ideas

• The entry test requires the bar’s low to be between the 13-day and 21-day EMAs and within 10% of the prior 504-bar high.
• The code does not require a fresh two-year high on the entry bar.
• The stated exits use a 5% breach below the 21-day EMA or a 20% decline from the prior high.
• The document flags gap risk, false signals, and the need to test filters and parameters.
• No backtest performance evidence is reported.

Tags

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