Analysis Methodology

Our "Buy or Sell" signals are generated by a proprietary algorithm that aggregates data from five distinct analytical models. We believe that no single indicator tells the whole story, so we combine technical, fundamental, and sentiment data to provide a holistic view.

1. Fair Price Position Weight: 30%

We calculate a "Fair Price Range" for each stock based on its rolling 30-day volatility and price action. This statistical approach helps identify when a stock is extended (overbought) or oversold relative to its own recent history.

  • Oversold: Price is below the statistical lower bound. This is often a buying opportunity.
  • Fair Range: Price is within the expected statistical variance.
  • Extended: Price is significantly above the statistical upper bound. This suggests higher risk of pullback.

2. Options IV & Sentiment Weight: 25%

We analyze the Options market to gauge "Implied Volatility" (IV) percentile. This tells us if options premiums are historically cheap or expensive.

  • Low IV (< 30th percentile): Options are cheap. This is bullish for long strategies as you pay less for exposure.
  • High IV (> 70th percentile): Options are expensive. This often indicates fear or uncertainty, but can be an opportunity for sellers.

3. Investment Quality Score Weight: 25%

Our core "Investment Score" evaluates the long-term quality of the company based on fundamental metrics.

  • Profitability: Net margins, ROE, and free cash flow.
  • Growth: Revenue and earnings growth acceleration.
  • Health: Debt-to-equity ratios and current ratios.

4. Technical Trend & Momentum Weight: 10%

We analyze key support and resistance levels using trendlines and pivot points.

  • Support: Price levels where buyers have historically stepped in.
  • Resistance: Price levels where sellers have historically taken profits.
  • Momentum: Rate of change analysis to determine the strength of the current move.

5. Fundamental Valuation Weight: 10%

We compare the current Forward P/E ratio against:

  • The company's historical 5-year average P/E.
  • The implied growth rate priced into the stock.
  • Analyst price targets and consensus ratings.

This ensures we aren't just buying momentum, but paying a rational price for future earnings.

Confidence Score

The final "Confidence Score" (0-100%) represents the degree of agreement between these five models.

  • High Confidence (> 70%): Most models align (e.g., undervalued + uptrend + good fundamentals).
  • Moderate Confidence (45-70%): Generally positive but some conflicting signals.
  • Low Confidence (< 45%): Conflicting signals (e.g., good fundamentals but broken technicals).