U.S. Trend Following — A Quantitative Guide
This note explains how Trend Screener US quantifies U.S. common stocks (NYSE · NASDAQ · AMEX) every trading day, and how to read the results in practice. Every figure here is computed from confirmed end-of-day bars, free of intraday quote noise.
1. How weighted Relative Strength (RS) is computed
Relative Strength (RS) expresses, as a percentile rank, how strongly a stock is moving relative to the entire market. Instead of a plain trailing one-year return, Trend Screener applies a William O'Neil–style weighted average that gives more weight to recent momentum.
→ ranked against the whole market as a percentile → RS Rating 1 – 99
Because the 3-month window carries 40% of the weight — with 1 month at 30% and 1 week at 10% confirming a recent turn — the stocks that break to new highs first, right as the index stops falling and turns up, earn the highest scores. RS is a relative rank, not an absolute return, so even in a falling market it surfaces the names that "fall less," revealing the next leaders early. An RS Rating of 99 means momentum in the top 1% of the market.
2. Why we use only confirmed daily closing bars
The U.S. regular session closes at 16:00 ET. Trend Screener recomputes every stock only after that close is confirmed. Calculating on intraday prices would make ranks flicker minute to minute, toggling the same condition on and off; computing once a day on the confirmed close keeps signals stable and lets the U.S. and Korean markets be compared on one yardstick. When splits or dividends retroactively adjust past prices, the full history is re-downloaded onto the same adjustment basis so moving averages and RS are not distorted.
3. Trend Template — Minervini's 8 trend conditions
The 8/8 in the TREND TEMPLATE column means a stock passes all eight conditions of Mark Minervini's Stage 2 uptrend:
- Price is above both the 150-day and 200-day moving averages
- The 150-day MA is above the 200-day MA
- The 200-day MA has been trending up for at least one month
- The 50-day MA is above both the 150-day and 200-day MAs
- Price is above the 50-day MA
- Price is at least 30% above its 52-week low
- Price is within 25% of its 52-week high
- RS Rating is 70 or higher
Together the eight conditions quantify a single state: short-, mid-, and long-term moving averages stacked and rising, price near new highs, and relative strength above the market. Liquidity is kept separate: the filter bar's volume control sets a minimum 50-day average volume (100K / 500K / 1M / 3M shares).
4. The 'L' in CAN SLIM and the RS Rating — William O'Neil
In O'Neil's CAN SLIM model, the 'L' stands for "Leader or Laggard." He named the RS Rating as the key quantitative metric for that call, advising buyers to focus only on leaders with a score of at least 70 — and preferably 80–90 or higher. The filter bar applies this directly: raise the RS floor to 90 (or 80/70) to keep only top-momentum names, then check several industries at once in the industry filter — it is ordered by the Industry Rankings, the same five-pillar Industry Score (0–100) as the industry rankings page — to end up with strong stocks inside strong groups, O'Neil's insight in two clicks.
5. ADR% — how much this stock moves in a day
Two names can both pass 8/8 and still demand completely different trade management: one drifts 1% a day, the other swings 6%. The ADR column puts that difference into a single number. ADR% (Average Daily Range) is how much higher the high was than the low on an average day over the last 20 sessions.
Where the change column measures close-to-close movement, ADR% measures intraday travel, regardless of direction — a stock that closes flat all week but swings hard inside each session still reads high. Trend traders check it early for two reasons. First, it caps what a trade can reasonably return: a 2% ADR name will not hand you 20% in a few days. Second, it sets the stop distance — put a 2% stop on a 6% ADR name and ordinary intraday noise takes you out before the move even begins.
The ADR filter offers floors of 3% · 3.5% · 4% · 4.5% · 5%. Around 3% is the conventional starting line: quieter names can be in a perfectly valid uptrend and still take months to produce a move worth trading. Raising the floor thins the list quickly. But ADR% is not a "higher is better" number — more volatility means a wider stop, which means a smaller position for the same risk, and readings well above 15% usually flag thin trading or a one-off event. The point of the filter is to match the list to the stop distance and holding period you actually trade.
6. VCP and the pivot — Minervini-style entry timing
Minervini's method centers on the Volatility Contraction Pattern (VCP) and the breakout above a pivot. As a stock in a long-term uptrend works through a correction, the amplitude between lows and highs contracts (e.g., 25% → 12% → 6%) and volume dries to 20–30% of normal as supply is absorbed and energy builds. The RS 90+ leaders Trend Screener surfaces are likely to form a VCP when the index wobbles, showing firm support near their 50- and 20-day averages. The moment a leader whose RS kept rising while the index fell finally clears its pivot as the index rebounds is the spot with the best reward-to-risk.
7. U.S. earnings season and gaps — using the screener
U.S. stocks tend to gap sharply around quarterly earnings. A name that gaps up on an earnings surprise with surging volume often sees its RS jump and newly passes the eight conditions the next day. Conversely, volatility around the report can briefly disturb a trend, so it pays to track the earnings dates of your watchlist. Because the screener recomputes every stock after each close, it is especially useful for quickly catching leaders that newly qualify the day after earnings.
8. Breakout and pullback trading
Trend Screener is an equally strong starting point for breakout or pullback trading, because success is decided less by the entry technique than by "which stock you trade." New-high breakouts follow through most often in high-RS leaders, while laggard breakouts fail far more frequently. So breakout trading is best concentrated on pivot breakouts in the very top RS names among the 8/8 list. Pullback trading targets the strongest leaders when they dip toward their 10-, 20-, or 50-day averages: the stop sits close, so the risk taken is small while the rebound potential is greatest.