Methodology

1. Signal score

Every ticker is scored on a 0–100 scale. The score starts at a neutral baseline of 50 and is adjusted up or down by each technical indicator based on the state of the market for that symbol. Final scores are clamped to [0, 100] and classified into one of five decisions:

• 85–100 — STRONG BUY
• 70–84 — BUY
• 50–69 — STAND ASIDE
• 30–49 — LEAN SHORT
• 0–29 — STRONG SELL

2. Indicator contributions

The score is assembled from seven indicators. Each contributes a bounded weight; the exact deltas are published here so the score is fully reproducible.

EMA trend structure (±15)

• Price above both EMA-20 and EMA-50 — bullish trend confirmed: +15
• Price below both EMAs — bearish trend confirmed: −15
• Price above EMA-20 only (partial alignment): +5
• Price below EMA-20 only: −5

MACD (±15)

• MACD above signal line and positive: +15
• MACD above signal line (inflecting): +8
• MACD below signal and negative: −15
• MACD crossed below signal: −8

RSI-14 (±10)

• RSI > 70 — overbought, reversal risk: −10
• RSI 55–70 — bullish momentum zone: +10
• RSI < 30 — oversold, mean-reversion potential: +8
• RSI 30–45 — bearish momentum zone: −10

Rate of Change, 10-day (±10)

• ROC > +5% — strong positive momentum: +10
• ROC 0 to +5%: +4
• ROC < −5% — significant negative momentum: −10
• ROC 0 to −5%: −4

Bollinger Bands, 20-period (±8)

• Price breaking above upper band — breakout: +5
• Price below lower band — breakdown: −8
• Price above middle band: +3

OBV (±7)

On-Balance Volume is trending up when the last OBV reading is higher than the reading five bars prior.

• OBV rising — volume confirming price: +7
• OBV declining — volume diverging: −7

ATR — risk context only

Average True Range does not move the score. It is reported as a percentage of price and used to label risk: below 2% is Low, 2–4% is Medium, above 4% is High.

3. Indicator definitions

• EMA-20 / EMA-50 — exponential moving averages over 20 and 50 bars. Smoothing factor k = 2 / (period + 1).
• MACD — EMA-12 minus EMA-26 of close prices. Signal line is the 9-period EMA of the MACD line.
• RSI-14 — Wilder-style relative strength index on 14 bars of close-to-close changes.
• ROC-10 — (close − close₁₀) / close₁₀ × 100.
• Bollinger Bands — 20-period simple moving average with upper and lower bands at ±2 standard deviations.
• ATR-14 — Wilder-style average true range, reported both in price units and as a percentage of the last close.
• OBV — cumulative volume, added on up bars and subtracted on down bars.

4. Rationale and trade plan

Each signal is accompanied by up to five bulleted reasons — the same conditions that moved the score. The Pipeline Demo also displays a suggested entry, stop, and target, and a projected price path from entry to target (bullish) or entry to stop (bearish). The projection is illustrative of the posted trade plan; it is not a forecast.

5. Backtest metrics

The Performance section runs a 5-year SPY backtest comparing an EMA-20/50 crossover strategy against buy-and-hold on weekly close data, using real market data refreshed on each page load. Reported metrics:

• Sharpe Ratio — annualised mean return over annualised return volatility, computed on weekly strategy returns.
• Total Return — cumulative return of the strategy over the backtest window.
• Max Drawdown — largest peak-to-trough decline of the strategy equity curve.
• Win Rate — share of weekly bars with positive strategy return.
• Alpha vs Buy-and-Hold — total return minus the baseline SPY return over the same window.

6. Data sources

Signals are served by the live pipeline. When the pipeline is reachable, indicator and signal computation run on the backend. When it is not, the homepage demo falls back to Yahoo Finance OHLCV with the same indicator and scoring code as the backend, so the score you see on the demo is the same score you would get from the pipeline for the same input bars.

7. Disclaimer

Signals and metrics on this site are for informational purposes only. They do not constitute investment advice, a recommendation, or an offer to buy or sell any security. Past performance does not guarantee future results. Always conduct your own research before making capital decisions.

Questions about the methodology? hello@quantlys.ai. See also Terms of Service.