The short version
- Collect. Each week I read the TradingView screener for seven indexes: S&P 500, FTSE 100, Nifty 50, Nikkei 225, CSI 300, KOSPI 200 and the Straits Times Index.
- Score each measure. Most measures are turned into a score from 0 to 100 by ranking the stock against the others in its own market. A stock in the 80th percentile scores about 80.
- Combine. Each measure has a weight. The final score is the weighted average, rounded to one decimal place.
- Rank. The highest scores make the lists. A weak spot lowers the score but does not remove a stock, so each list shows where it is weak.
Ranking within a market is what keeps the comparison fair. A cheap P/E in India is judged against other Indian stocks, not against Japan or the US. For the same reason, a score on one country's list is not directly comparable with a score on another country's list.
Long-term holders
This list looks for companies that are doing well, are priced reasonably, do not carry too much debt, and have not just spiked.
| Measure | Weight | How it is scored (0 to 100) |
|---|---|---|
| Price trend | 30% | The 3, 6 and 12 month price gains. 60% of this measure is how they rank against the other stocks in the same market, and 40% is how large the gains really are, so a stock cannot score well just by being the best of a weak group. |
| Profitability (ROE) | 15% | Return on equity, ranked against the other stocks in the same market. Higher is better. |
| Valuation (P/E) | 15% | Price to earnings ratio, ranked against the same market. A lower P/E scores higher. A company with no earnings (no P/E) scores 0. |
| Earnings growth | 10% | Growth in earnings per share, ranked against the same market. Growth is capped between -50% and +100% so that a rebound from a very low base cannot dominate. |
| Debt level | 10% | Debt to equity, ranked against the same market. Lower debt scores higher. Banks and insurers get a neutral 50, because debt means something different for them. |
| Analyst view | 10% | Analysts' average rating on TradingView: Strong buy 100, Buy 75, Neutral 40, Sell 10, Strong sell 0. |
| Not overheated (RSI) | 10% | The 14-day RSI. Up to 60 scores 100. Above 60 loses 5 points for every RSI point, so 80 scores 0. |
Day traders
This list looks for stocks with a reason to move today: unusual activity, a favourable technical reading and enough movement to trade. It says nothing about whether the company is a good business.
| Measure | Weight | How it is scored (0 to 100) |
|---|---|---|
| Technical rating | 25% | TradingView's short-term technical rating: Strong buy 100, Buy 75, Neutral 40, Sell 10, Strong sell 0. |
| Unusual volume | 25% | Today's volume divided by the normal volume. 0.6 times normal or less scores 0, 2 times normal or more scores 100, in a straight line between. |
| Momentum (RSI) | 20% | The 14-day RSI. 50 to 68 scores 100. Below 50 it falls to 0 at an RSI of 30. Above 68 it falls to 0 at an RSI of 85. |
| Room to move | 15% | One-month volatility. 3% or more scores 100. Above 6% the score starts to fall, because the stock may be too wild to trade calmly. |
| Today's move | 15% | A gain of 0% to 4% scores 100. A fall loses 15 points per percentage point below zero, from a starting 60. A rise above 4% also loses 15 points per point, because the move may already be spent. |
Full marks on RSI or today's move only mean the reading sits in the range this score favours. They are not a signal that the stock is strong.
A worked example
Take-Two Interactive (TTWO) on the day traders list, with its five measure scores:
| Measure | Score | Weight | Points |
|---|---|---|---|
| Technical rating (Buy) | 75 | 25% | 18.75 |
| Unusual volume (2.34 times normal) | 100 | 25% | 25.00 |
| Momentum (RSI 59.5) | 100 | 20% | 20.00 |
| Room to move | 100 | 15% | 15.00 |
| Today's move (+2.1%) | 100 | 15% | 15.00 |
| Total | 100% | 93.75 |
The total of 93.75 is rounded to 93.8 on the site. A high score here means the stock fits the day-trading pattern well. It does not mean the price will rise. The long-term score is worked out the same way, with the seven measures and weights above.
Rules that apply to everything
- Missing data counts against a stock. If a figure is not available, that measure is scored 25 out of 100 rather than skipped. This can make a score understate a stock, and the stock's page says which measures were missing.
- No more than 3 picks from one country on a global list.
- Industry lists use the long-term score across all seven indexes, grouped into six sector groups.
- Each list names its weak spots. Each stock page shows its weakest measures (any that scored below 50, up to two), so a high score does not hide a problem.
What the score cannot tell you
- It uses a snapshot of figures read from the TradingView screener on a set date. Prices and ratings move after that.
- The numbers are read by hand and can contain mistakes. TradingView's own symbol pages can show slightly different values.
- It ignores things that are hard to measure, such as management quality, new competitors, lawsuits and the wider economy.
- Past performance does not predict future returns.
Research only, not financial advice. If you spot a mistake in the method or in a figure, please tell me.