The ChartMill analyzer reports produce 2 scores that qualify a stock from a technical perspective:
We’ll give more details on the scores below. The reason why these a separate scores is that a stock showing good technicals does not automatically make a good setup. A stock with decent technicals can for instance be extended, making it hard to find a good entry and exit point. But also the inverse is possible: a stock with a lesser technical rating can still make a great setup.
The ChartMill Technical Rating quantifies the technical health of the stock, taking into account both the long and short term timeframes, as well as the position of the stock in the universe of stocks. The score takes into account the items listed below among other things:
The ChartMill Technical Rating can also be used to identify market leaders. The higher the score, the stronger the trend. Below are some examples of stocks scoring a perfect 10 at the time of writing:
The charts above are weekly charts, so they show how only a nicely distributed longer term trend leads to a perfect TA score.
The chartmill Setup Quality score quantifies the quality of the setup pattern. Typically a good setup is available when the stock is forming some kind of consolidation/base pattern. Several properties are taken into account:
Below are some examples of stocks with a high ChartMill Setup Quality Rating:
These are daily charts, a high setup score indicates some kind of price consolidation, so you will see prices trading in a narrow range.
The Technical Breakout Setups tab in the analyzer combines the ChartMill Technical Rating and the Chartmill Setup Quality Rating to present the best breakout setups in the market each day. These are found by filtering for stocks which have both a high TA Rating and a high Setup Rating. Combining both ratings will present technical setups in the best performing stocks in the market.
These properties can also be used in the stock screener. They can be used in various ways:
In the screener, on the ‘More Technical’ tab, 2 fields have been added:
You can select the values you need for your screen. This example lists all stocks with a Technical Rating of at least 8 and a Setup Rating of at least 8. Note that only a limited number of stocks might be listed due to market conditions.
The output of any screen can be sorted by Technical Rating or Setup Quality. This is handy as it will list the best quality setups first, so you will save time going over all stocks one by one to discover a good setup. To sort you results, change the ‘Order By’ property in the settings of the output of the screen:
This example shows the output of the Strong Stocks near New High screen sorted by Setup Quality. As you can also read in the documentation of the screen, this is typically a screen that does not present only setups. So sorting them can save you some time.
Finally, you can see the Technical Rating and Setup Quality values for every stock in almost every view. They are displayed in the tables or on the charts.