Edition

IFTA JOURNAL
2017 EDITION
StockCharts Technical Ranking (SCTR) System: How
the SCTR Indicator Can Help Novice and Advanced
Investors Rapidly Evaluate a Stock in Real Time
By Gregory Allen Schnell, CMT, MFTA
Gregory Allen Schnell, CMT, MFTA
StockCharts.com
gregs@stockcharts.com
144 Lake Mead Crescent SE
Calgary, AB, T2J 4A1
+1 (403) 999 - 7647
Abstract
This paper defines the StockCharts Technical Ranking
(SCTR)© indicator. The indicator has four main features. It
ranks how a stock price action is performing to a large peer
group in real time, assigning a value between 0–100. SCTR
plots the history of the stock’s relative performance, including
current value. The value does not change across different
plotted time frames of hourly, daily or monthly. The SCTR
provides a single value for a stock performance compared to its
peers for use by technical or fundamental investing styles.
Introduction
This paper defines how I use the StockCharts.com Technical
Ranking (SCTR)© indicator. This paper is also the first
introduction of the SCTR to the global professional community
of technical analysis. The indicator has been presented in
workshops designed to help users of the StockCharts.com
website over the years. It was recently refined in 2014. This
documents one of the many interpretations and uses for the
data of the plotted indicator to demonstrate the relative value.
The four features of the SCTR
The indicator has four main features. The SCTR ranks how a
stock price action is performing relative to a defined peer group
in real time. This is a larger group than just an industry group.
StockCharts.com has created three groups based on Market Cap
in large markets like the U.S. market. The SCTR gives a value
between 0–100. A ranking of 94 would suggest the stock is
behaving better than 94% of the stocks in the peer group.
Secondly, when plotted as an indicator, it also shows the
history of the stock’s relative performance to its group. The
value of the SCTR indicator at a point in time is the same across
all timeframes of minute, 10-minute, hourly, daily or monthly.
The SCTR indicator has the ability to quickly outline a stock’s
performance compared to its peers in one number for use by
technical or fundamental investing styles. It can educate new
or experienced investors by calculating a value for the relative
quality of price movement even though they all have a different
price. The SCTR quickly disseminates which stocks have better
price action than others. Once the indicator is explained,
investors can quickly evaluate a stock’s relative price action
compared to other stocks in the group in a tabular or chart
format. Apple currently has an SCTR of 31.5, and this paper will
supply information on understanding that value.
The last benefit of the SCTR is that it helps investors
eventually get a portfolio of very fast-moving stocks and
provides a simple exit plan to retain the gains. When you are in
very strong SCTR stocks and each one is trending very quickly,
your portfolio can capture dynamic, outsized gains, and the
indicator leads you to these stocks every day.
Materials and Methods
Calculating an SCTR
Each individual stock or ETF is calculated against six different
measurements and given a value. (Table 1)
Table 1. SCTR Calculation Parameters
SCTR Calculation
Long-Term Indicators (Weighting)
Percent above/below the 200-Day EMA 30%
125-Day Rate Of Change (ROC) 30%
Medium-Term Indicators (Weighting)
Percent above/below 50 EMA 15%
20-Day Rate Of Change (ROC) 15%
Short-Term Indicators (Weighting)
3-Day slope of PPO Histogram 5%
14-Day RSI 5%
The resulting value is compared to a peer group and creates a
ranking of the strongest price action to the weakest price action.
One important component is that stocks are ranked compared
to a peer group that has a controlled size. StockCharts.com
currently uses Large Cap, Mid Cap, Small Cap, and ETFs to create
peer comparisons for U.S. equities and ETFs due to the large size
of the U.S. market. Using Canada as an example, all of the stocks
and ETFs in the market are used as one peer group. As the SCTR
is not market-cap-weighted, this differs substantially from
comparing to the S&P 500 in Relative Strength.
Historical Data. The historical data has been built up over
an eight-year period from 2007–2015. Because you need all
the stocks at the same time to rank each stock against one
another, it is very difficult to go back and replicate the data.
Using the historical database, we have now developed a much
greater understanding of the data and how the SCTR behaves
in bull markets. The bear market of 2007–2009 gave us some
information for declining markets. However, we have two
years of bear market data and six years of bull market data.
The SCTR has excellent data from fall 2007 forward. With
this methodology, we are able to create a ranking of stocks
improving or falling out of favor continuously.
Displaying the Data. Table 2 shows the SCTR being used to sort
stocks within an industry group.
By ranking the Equities and ETFs based on one value within
their peer group, the SCTR calculation makes the stock’s
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