In the ChartFilter
September newsletter we covered moving averages,
the pro's and con's of lagging indicators
and some moving average cross methods. But
how does this apply to screening for the
types of moving average crosses you want?
In this months newsletter we will show a
moving average screen coupled with price
and volume ratio's to get the types of crosses
you want.
Review of
price and volume ratios
The
price/volume average used in these ratios
are calculated using simple moving average
formula. The last point in the simple
moving average is then stored as the average
price over (5,20,50,100) days. The current
close is then used for comparing against
this average.
If
a trader is looking for stocks that are
trading 50% higher than their (5,20,50,100)
day price or volume average. The ratio
would 1.5. For stocks over 100% of their
averages, use the ratio 2.
Example:
|
Growth
(price above/below MA) |
Ratio |
| (
- 50 % ) |
0.5 |
| 0
% |
1 |
| 50
% |
1.5 |
Example 20 day price and volume
ratios:
Sample screen:
In the sample
screen we will be only using the 5&20
day EMA cross (6 month chart) as our moving
average cross in combination with some
price and volume ratios to reduce our
results list.
***The EMA
signals are based on a six month chart.
Changing the time frame for an EMA will
result in different signals!
Screen:
1) NYSE, 5
& 20 day EMA cross within last day,
2) 20 day price ratio greater or equal
to 1
3) 20 day volume ratio greater or equal
to 1.1
