Trend Screener — Quantitative Analysis Notes
1. How the RS metric is computed and how to read its weighting
Relative Strength (RS) is a quantitative metric that expresses, as a percentile rank, how strongly a given stock is moving relative to the entire market. To produce a William O'Neil–style RS, you should not use a plain trailing one-year return; instead you apply a weighted-average formula that gives more weight to recent momentum. The Trend Screener relative-strength engine weights the most recent 3-month performance at 40% and the 6-, 9-, and 12-month windows at 20% each to produce a final score. That weighted score is then compared against the whole market and mapped to a grade from 1 to 99: a stock with an RS Rating of 99 is a super-leader whose momentum currently ranks in the top 1% of the market. Because 40% of the total weight rests on the most recent 3-month window, the engine is optimized to catch the market leaders that break out first, right as the market stops falling and turns up.
2. Leadership trading tips based on the CAN SLIM model
William O'Neil's CAN SLIM model is regarded as the essence of growth-stock investing. One of its core pillars is "Leader or Laggard" — deciding whether a stock is a market leader or an also-ran — and the key quantitative metric for that call is the RS Rating. O'Neil advised concentrating buying only on leaders with an RS score of at least 70, and preferably 80 or 90 and above. Trend Screener faithfully reflects the master's trading rules: it surfaces only the strong names that satisfy all 8 trend criteria (the Trend Template), the guideline for a Stage 2 uptrend. From the filtered list, investors can pick stocks that belong to strong sectors and are backed by growing sales and operating profit, add them to a watchlist, and plan an entry as volume dries up and energy builds.
3. Mark Minervini's VCP pattern in harmony with RS strength
Mark Minervini carried O'Neil's CAN SLIM theory into the modern era and won the U.S. Investing Championship two years running. The heart of his method is the Volatility Contraction Pattern (VCP) and the breakout above a pivot point. Minervini showed that after a stock joins a long-term uptrend and goes through a time correction, a strong breakout signal appears at the point where the amplitude between lows and highs progressively contracts (e.g., 20% → 10% → 5%) and volume collapses to 20–30% or less of normal. The super-strong leaders with RS 90+ that Trend Screener surfaces are highly likely to form a VCP when the market corrects, showing firm downside resilience near their 50- or 20-day moving averages. When a leader whose relative-strength score keeps rising while the index falls finally breaks its pivot as the index rebounds, that is the optimal entry with the best reward-to-risk.
4. A leadership strategy that covers both breakout and pullback trading
Trend Screener is an equally powerful tool whether you trade breakouts or pullbacks, because the success of both strategies is decided less by the entry technique itself than by "which stock you choose to trade." A new-high breakout is most likely to follow through in high-RS market leaders, whereas breakouts in neglected laggards end as fake breakouts far more often. So for breakout trading, the way to maximize your win rate is to focus only on pivot breakouts in the very top leaders — the highest-RS names among those that passed all 8 criteria. Pullback trading works on the same principle: buying when the strongest leader dips toward its 10-, 20-, or 50-day moving average during a temporary correction keeps your stop close, so the risk you take is small while the rebound potential is greatest — an overwhelmingly favorable outcome on both win rate and reward-to-risk. In the end, buying the strongest leaders on a breakout, or buying the strongest leaders when they pause to rest — these two are the textbook way to maximize the expected value of trend-following, and Trend Screener provides the starting point, "the list of the strongest leaders," refreshed automatically every trading day on confirmed daily bars.