What It Tries To Do
momentum_quality looks for stocks that are both moving well and financially sound. It avoids buying momentum blindly when company quality looks weak.
How It Decides
The strategy checks price momentum and trend, then applies quality filters such as return on equity and debt/equity. It ranks candidates by a blend of momentum and quality.
Simple Example
Two stocks are rising. One has high return on equity and controlled debt. The other is rising but is heavily leveraged. This strategy will usually prefer the first stock.
When To Use It
Use it when you want a long-only equity strategy that combines price strength with fundamental discipline. Monthly rebalance is a good default after refreshing fundamentals.
What Can Go Wrong
It can miss turnaround stories because those companies may not yet pass the quality filters.
How To Read Results
Compare it with pure momentum. If drawdowns or failed trades improve without giving up too much return, the quality layer is adding value.