About & Investing Guide

About Trend Screener

Trend Screener is an investing aid for U.S. common stocks: it tests whether each name satisfies the Trend Template criteria on confirmed daily bars after the close, and ranks them by a weighted Relative Strength score. It distills the momentum strategies of the masters into mathematical, technical formulas.

Stage 2 Uptrend — overview

The masters of growth-stock investing divide a stock's life cycle into four stages (Stage 1: accumulation/base, Stage 2: advance, Stage 3: distribution/top, Stage 4: decline), and stress that you should trade only stocks in a Stage 2 uptrend. Stage 2 is where institutional buying floods in and the price rises fastest and strongest. Trend Screener mechanically filters the thousands of names down to those most clearly in a Stage 2 uptrend.

The Trend Template's 8 criteria and the liquidity filter

The Trend Template is a strict set of technical conditions for verifying that a stock is firmly in a Stage 2 uptrend. Trend Screener treats the 8 trend criteria below as the pass bar and, on each day's closing data, checks whether a stock satisfies all 8 formulas simultaneously — 7/8 counts the same as 0/8. The final liquidity item is excluded from the pass criteria and offered as an optional filter you can toggle in the screener.

1. Price vs. moving averagesPrice > SMA150 && Price > SMA200 Price must sit above both the 150- and 200-day simple moving averages, confirming it rides a mid/long-term uptrend.
2. Mid/long-term MAs alignedSMA150 > SMA200 The 150-day MA must be above the 200-day MA, showing the intermediate trend is stronger than the long-term trend.
3. 200-day MA risingSMA200 Trending Up (1M) The 200-day MA itself must be rising for at least a month; we compare the current value with the value 20 trading days ago to judge the slope.
4. Short/mid-term MAs alignedSMA50 > SMA150 && SMA50 > SMA200 The 50-day MA must be above the 150- and 200-day MAs, meaning short-term momentum is overpowering the long term.
5. Short-term price positionPrice > SMA50 Price must be above the 50-day MA — re-advancing after a brief pullback or sustaining the uptrend.
6. Advance off the 52-week lowPrice ≥ 52W Low × 1.30 At least 30% above the 52-week low. Many leaders are 100–300%+ above it.
7. Proximity to the 52-week highPrice ≥ 52W High × 0.75 Less than 25% below the 52-week high — a strong state, on the cusp of a breakout.
8. Relative Strength (RS) RatingRS Rating ≥ 70 The weighted RS score must rank in the top 30% of the market. In normal conditions, focus on names with RS 80 or 90 and above.

How the Weighted RS Score is computed

The screener's core edge is its proprietary weighted-momentum Relative Strength formula. Typical screeners use a plain one-year return, but the masters of trend-following place far more value on recent rate-of-change.

This formula rewards the "hot" leaders that surged over the last 3 months. The whole universe's scores are then converted to a percentile, the RS Rating (1–99). A stock with RS 99 is a top leader whose momentum ranks in the top 1% of the market.

The Volatility Contraction Pattern (VCP) and the pivot point

Once you've found a stock that passed the Trend Template and entered a Stage 2 uptrend, the actual entry should be timed with the Volatility Contraction Pattern (VCP). In a VCP, after a stock rises and goes through a time correction, the range between highs and lows progressively narrows — e.g., a 20% drop on the first correction (1T), 10% on the second (2T), and just 5% on the third (3T) — while volume also dries up toward the end of each pullback.

The spot in the final contraction where volume collapses and price goes flat is called the pivot point, or the line of least resistance, and the day price decisively breaks above it is the optimal entry (the breakout).

A practical investing workflow

1. Screen for leaders — turn on the "Passed only" and "Leaders" filters in the screener to narrow down to names with top-5% RS. To see only actively traded names, also turn on the "Liquidity" filter.
2. Analyze industry relative strength — on the Industry Analysis page, see which sectors institutional money is flowing into. Stocks in strong industries break out successfully far more often.
3. Build a watchlist — add the selected top names to the watchlist in your charting tool and scan the charts quickly.
4. Hunt for VCPs — find names whose volatility has contracted sharply near the 50- or 20-day MA with volume drying up, and queue a buy order at the pivot breakout.
5. Set your stop — the moment you buy, place a stop just below the pivot or the recent short-term low (usually within 5–8% of your entry) to strictly limit risk.

Frequently Asked Questions (FAQ)