Rankings, Trending and Deltas

Most of have followed or read about share trading would know about Fundamental Analysis and Technical Analysis. The former uses various financial ratios (eg debt to equity) while the latter uses stock charting techniques (eg moving averages).

However, there is another method based on relative ranking. For whatever techniques used, when there is a quantity that is calculated for each stock, then the stocks can be ranked according to this quantity. Instead of looking at the value (say PE ratio), we rank the stocks according to this value (say PE ratio). So the ranking is 1, 2, 3, ....  where 1 is the best stock, based on that value.

Then we can analyse the movement of ranking, and pick the stocks that have moved in this ranking. Just to emphasise again, this ranking can be for any values or quantities, whether from Technical or Fundamental Analysis.

Here are some strategies for Ranking Analysis.

1. Top 10 stocks - search Ranking <= 10

2. Stock that moved inside the Top 10 just last week (looking for crossover) -
search Ranking - Trending - week2 > 10, week1 < 10

3. Improved Rank on % the most
search Ranking - Delta - 10 days - sorted Ascending

4. Ranking has improved, ie positive % change
search Ranking - Delta - 10 days < 0.0%

The two key searches are Trending and Delta. They need to be used for Ranking only. When using Trending and Delta, for an ordinary quantity, where bigger is better:

1. Value = X, this is the good level

2. The value crossover a certain threshold
search Value - Trending - week2 < X, week1 > X

3. Improved Value the most
search Value  - Delta - 4 weeks - sorted Descending

4. Value  has improved, ie positive % change
search Value - Delta - 4 weeks > 0.0%