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What does the Technical Rating mean? |
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The Technical Rating that appears for each stock is calculated by comparing the most of the technical parameters
and its price change over the past 12 months to that of all other stocks in the tables. Results are rated on a scale
from 1 to 99, with 99 being best.
A Technical Rating of 99 is the highest possible and means the stock has outperformed 99 percent of all stocks. A
Technical Rating of 1 means nearly all other stocks have done better. Market leaders usually rate 70 or higher. |
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How is the Fundamental Rating calculated? |
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‘99’ rating is the highest mark and represent the top performer of all stocks. Fundamental factors such as sales
growth rate over the last three years, pre-tax profit margins; after-tax profit margins; return on equity (ROE). |
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What does the Final Rating represent? |
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The Final Rating combines both Technical & Fundamental Ratings into one easy-to-use rating. Each of these ratings
consists of several parameters with different weightages assigned to each parameter. The results are then compared
to the results of all other companies on every parameter. Each company is then assigned a rating from 1-99 with 99
being the best.
This rating is designed to help you get a quick feel for how is a company compare to all other stocks in our database. |
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How can a stock's Technical Rating go down when the stock itself is going up? |
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The fact that your stock has gone up while its Technical Rating has fallen does not automatically mean you need to
sell it. What it means is that other stocks are performing better relative to this particular stock. As a general rule, you
may start thinking about selling a stock if its Technical Rating falls below 50. However, it would be more of a concern
if the stock were falling or going nowhere. |
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How can a stock be in consolidation and still have a Technical rating of 80+? |
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A stock's Technical Rating may dip as the stock works its way through a base, or price consolidation. This is normal
because the price declines required to form a base will weigh on the Technical Rating. But as the stock climbs back
toward its old high, the rating should rebound as well. So, while a stock may have a lower Technical Rating as it
builds its base, the important thing is for it to have a rating of 80 or higher (meaning it is among the top 20 percent
of all stocks in terms of price performance) as it finishes its base. If most stocks drop 20 percent and yours falls 10
percent, it's still stronger than most other stocks even though it fell in price. Historically, the best stocks have hadTechnical Ratings of 80 or higher at their breakouts. |
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If the ratings for a stock fall, should it be sold? |
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All of the Ratings are updated daily. Technical Ratings change more often than fundamental rating because they
reflect the market's daily activity. The Fundamental ratings reflect companies' fundamentals and change less
frequently because companies report results on a quarterly basis. You shouldn't automatically sell a stock just
because a Technical rating drops. But any time you see such a drop, it serves as a signal to watch the stock for signs
of weakness. |
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Does a high Technical Rating mean the stock has already made its big price move? |
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You want to buy the best merchandise available. A Technical Rating of 90 or higher will generally show that it is a
leader and has been outperforming nearly all the other stocks in the market. Ex. TTK Prestige Ltd, Titan has technical
rating of 98 throughout most of 2010-11, yet continued to make new highs. |
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Should I be concerned if the Technical Rating reaches a new high but the stock's price doesn't? |
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No, you should not be concerned if a stock's Technical Rating hits a new high when the actual stock price is not at
a new high. In fact, it is generally a positive sign when a stock's relative strength goes into new high ground prior
to the stock breaking out of its base. A high relative strength indicates the stock is performing relatively well in the
current market environment, which is an indication of demand. |
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Is it too late to buy a stock that has a Rating of 99? |
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Not necessarily. A 99 indicates tremendous leadership. Our studies show that the strongest companies continue their
advances because they have superior earnings, strong management and are in leading industries. |
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Can the Final Rating be used to screen potential stocks? |
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Yes, the Final Rating can be used as a filter to identify stocks for potential purchase. In fact, this rating was designed
as a quick and easy way for VarunDaga.com subscribers to compose a list of potential buy candidates. Focusing
on those stocks with a Final Rating of 70 or higher will yield a large number of stocks for further research. But
remember, checking a stock's Ratings is just the first step of your research. It's also important to really understand a company's fundamentals, including its sales and earnings, return on equity, profit margins, products, etc. Much of
this information can be researched at a company's Web site.
We offer 7-day trial subscriptions of our services, which includes SMS Advisory, Stock Trend, Stock Rating, Portfolio
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