We wouldn't be complete without a special bonus article, right?! So, to close out our welcome series with a big finale, we've got something very powerful to share with you.
Originally based on John Murphy's approach to analyzing the markets, the StockCharts Technical Rank (SCTR) is a numerical score from 0 to 100 that ranks a stock or ETF within a larger universe of related securities. Values are calculated based on six key indicators, covering different timeframes. Because the calculation is not tethered to one specific timeframe, a stock or fund must score well with all indicators in all timeframes to earn a top technical rank.
The key here is that the StockCharts Technical Rank shows how a stock or fund is performing relative to its peers, not a benchmark index. Many indices, such as the S&P 500, are dominated by the mega-cap stocks and may not truly reflect the market as a whole. Instead of benchmarking to one index, SCTRs rank all securities within a specific universe, such as large‑, mid‑ or small‑cap stocks. This allows you to directly compare SCTR values within the same universe.
Because the values can be directly compared, SCTRs make it quick and easy to identify the technical leaders and laggards within a group. Stocks in the top 25% of their universe rank 75 or higher, while those in the bottom 25% rank 25 or lower. If stock A has a value of 96.5 while stock B has a value of 14.9, you can immediately tell that the first stock is a much stronger performer than the second. In this sense, SCTR values naturally separate the wheat from the chaff.
You can find links to our SCTR rankings throughout the site, including on Your Dashboard and the Charts & Tools page. Once there, use the blue dropdown menu at the top of the SCTR page to select the universe you're interested in. You can choose from large‑, mid‑ or small‑cap stocks, US ETFs, Toronto stocks and more. The rankings for that universe, listed in the table below, are automatically sorted by SCTR value from highest to lowest. If you're looking for a specific stock or fund, use the search box to filter the table and find exactly what you're interested in.
The SCTR value can be added to a chart as an indicator panel on the SharpCharts Workbench. Analyzing how a stock or ETF's technical rank has changed over time can help you find promising opportunities when new trends emerge.
For instance, many technicians pay close attention when a rising SCTR value crosses 75. This jump into the top 25% range signals a good time to add the stock or fund to your watchlist and keep an eye out for a buying opportunity. Always remember, a rising SCTR value indicates increasing strength, while a falling SCTR value indicates developing weakness.
To add the SCTR indicator panel to your chart, find the "Indicators" section of the SharpCharts Workbench. Select "SCTR Line" from the dropdown menu and click the update button.
In the previous section, we learned that technicians often watch for rising SCTR values to cross above 75. Using our Advanced Scan Workbench, you can easily write a scan to find stocks or ETFs that are doing just that.
For more information and examples of scans using SCTR values, click here.
Join Grayson Roze, VP of Operations at StockCharts, as he explores all the different ways around the site to use our StockCharts Technical Ranking system. Plus, he'll demonstrate how he personally uses SCTRs in his own approach to the market.
Well, that's quite a bit, huh? We've hit you with a lot in these past few articles, but hopefully this has given you a great sense of what's available on StockCharts, what you can do with the platform and how you can use our wide array of tools and features to improve your investing results.
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