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Fundamental & Technical SCORING system
Since the beginning of this PrimeTrading adventure, I am always trying to add value to the Newsletter and the overall PrimeTrading content by listening to members’ feedback & suggestions.
One of those things is the famous spreadsheet that I share each day on Twitter and in the Newsletter to score each stock in the US stock market. I got a lot of question and interest about getting access to it, so I decided to make it available in the daily Newsletter content.
But what is that spreadsheet, Alex…?
I found that screening thousands of chart patterns each night, and then validating if the fundamentals were good or bad (based on #CANSLIM), was very time-consuming…so I decided to make it the other way around. I wanted to rank all the stocks based on fundamentals and right away get the best of the best in a spreadsheet with all the relevant information.
In the past few years, I developed an automated model in a spreadsheet, similar to what IBD MarketSmith offers. It allows me to give a score for each stock in the US stock market and to find the best of the best names that fit my model.
Free access to my PT_database (updated daily) 👇
Here’s how the PRIME model is built:
FUNDAMENTAL (FA) SCORE:
Quarterly earnings growth and acceleration in the past 3 Q
Quarterly Sales growth & acceleration in the past 3 Q
Quarterly EPS & Sales Growth Amplitude
Q EPS Surprise over the last 3 Q
Annual EPS & Sales acceleration & growth over last 2 Y
EPS JUMP - which is the increase in the most recent Q EPS Over the last 7 Q average
Margins growth over the last 3Q
And finally, the projected EPS and Sales for the next Q
Fundamentals are only the starting point of a trade idea for me, most importantly, I am only interested in the names showing the best technicals & charts as well. So on top of that FA score, I also developed a technical score (TA) to help me keep the focus on the stocks that are in a confirmed uptrend and outperforming all the other stocks.
TECHNICAL (TA) SCORE:
Trending moving averages (10, 20, 50 sma)
RS-1M: Over the last 1M, with a 1-week step, with an emphasis on the most recent week
RS-3M: Over the last 3M, with a 1-month step
RS-6M: Over the last 6M, with a 1-month step
To get my focus on both the stocks with the best fundamentals & technicals, I made another score that gives a final score based on a weighting between my FA & TA score. So with this PRIME score, I get only the stocks that have solid fundamentals, BUT, also have the technical characteristics I am interested to see.
A mix of FUNDAMENTAL & TECHNICAL scores
Adjusted with a model ratio to adjust the weight between the two
There are also other characteristics I want to see in each stock I consider trading, such as:
🚀 Ratio < 150 (Float/avrg vol.)
Number of float shares / daily average volume
The smaller the ratio, the quicker the stock tends to move
Growth Score > 35
Average daily volume (3 months) > 500 000 shares
Average daily liquidity (3months) > 10 000 000$
Market cap < 200 bil$