Methodology
How StockT works
StockT is a transparent, rules-based model — not a black box and not a human stock-picker. Every rating can be traced back to the numbers below.
1. Gather
Every trading day StockT collects split- and dividend-adjusted daily prices and volume for its coverage universe — about 85 liquid US large caps across all 11 sectors — plus the SPY, QQQ, DIA and IWM index ETFs. Where a fundamentals provider is connected it also collects valuation, profitability, growth and balance-sheet data, company news, and live quotes. Stocks trading less than $5M a day are excluded.
2. Evaluate
Each stock is measured on a set of factors. Every factor is then ranked against the rest of the universe as a percentile (0 = worst, 100 = best), flipping direction where lower is better. Percentiles make very different measures comparable and stop one outlier from dominating.
Short-term model (about 1–4 weeks)
| Factor | Weight | What it measures |
|---|---|---|
| 1-month momentum | 20% | Return over the last 20 trading days. |
| Strength vs S&P 500 (1M) | 15% | 1-month return minus the S&P 500's (SPY). |
| Price vs 50-day average | 15% | How far price sits above/below its 50-day trend. |
| RSI(14) positioning | 15% | Peaks at RSI 60: momentum without being overbought. |
| 1-week momentum | 10% | Return over the last 5 trading days. |
| MACD histogram | 10% | MACD(12,26,9) minus signal, scaled by price. |
| Volume confirmation | 10% | 5-day vs 50-day volume, in the direction of the move. |
| Daily volatility (ATR %) | 5% | Lower is better — easier to manage risk. |
Long-term model (about 6–24 months)
| Factor | Weight | What it measures |
|---|---|---|
| 12-month momentum (ex last month) | 18% | The classic 12-1 momentum factor. |
| Risk-adjusted return (1Y Sharpe) | 14% | Average daily return ÷ its volatility, annualised. |
| Valuation (P/E) | 12% | Lower is better; negative earnings are excluded. |
| Price vs 200-day average | 10% | Position relative to the long-term trend. |
| Quality (return on equity) | 10% | Profitability of shareholders' capital. |
| Revenue growth (YoY) | 10% | Year-over-year sales growth. |
| Annual volatility | 8% | Lower is better. |
| Max drawdown (1Y) | 8% | Worst peak-to-trough fall; shallower is better. |
| 50-day vs 200-day average | 5% | Golden-cross vs death-cross regime. |
| Debt / equity | 5% | Lower is better. |
If a factor is unavailable for a stock (for example, fundamentals are not connected), it is dropped and the remaining weights are rescaled.
3. Rank and rate
The score is the weighted average of a stock's factor percentiles, from 0 to 100. Ratings are bands of that score: Strong Buy 75+, Buy 60–75, Hold 45–60, Weak 30–45, Avoid below 30. Because scores are relative, a rating says how a stock compares with its peers today — not that its price will rise.
4. Plan
- Short term: entry zone from the last close down to 0.5× ATR(14) below it; stop 2× ATR below the close; target 3× ATR above it (1.5 : 1 reward-to-risk).
- Long term: an accumulate zone between the 50-day average and the last close, and a thesis-break level at the higher of 95% of the 200-day average or 75% of the price.
- Market regime: SPY above/below its 200-day average with the 50-day confirming → risk-on / risk-off, with position-sizing guidance.
What the model does not do
- It does not know about upcoming earnings dates, lawsuits, mergers or other events — check the news.
- It does not predict prices. Factor models tilt the odds over many trades; any single stock can and will do the opposite.
- It has not been audited or validated by a third party, and past factor performance does not guarantee future results.
- It knows nothing about you — your goals, timeframe, taxes or tolerance for loss.
Important notice
StockT is for education and general research only. Nothing on StockT is financial, investment, tax or legal advice, or a recommendation to buy or sell any security. Rankings, ratings, price levels and guides are generated automatically from public market data and are the same for every user; they are not tailored to any person's circumstances. StockT is not a broker-dealer, investment adviser or financial planner and does not execute trades or hold funds.
Market data may be delayed, incomplete or wrong, and is provided “as is” without warranty. Investing in stocks involves risk, including the possible loss of all the money you invest. Past performance does not guarantee future results. You are solely responsible for your investment decisions; consider consulting a licensed financial professional before acting on anything you read here.