|Stock Market Quantitative Investment Strategies|
This strategy is based on Grant Henning's technical-model discussed in his book, "The Value and Momentum Trader".
You can also read more details on this method on the American Association of Individual Investers website here.
In order to be considered for selection the stock must meet the following criteria:
- The stock price must be over $5 per share.
- The stock must have average daily trading volume of at least 10,000 shares.
Although not part of Grant Henning's selection criteria we have only included stocks that trade on the Nasdaq and New York Stock Exchanges i.e. 'Over The Counter' stocks are excluded from the table below.
- The stock price must have risen at least 30% from the lowest intraday price over the last three months and must have at least doubled over the last 52 weeks.
Stocks that meet the above criteria are displayed in the table below.
- One point is awarded for stocks with a current price that is within 3% of the 52 high (i.e. the percentage lag of a stock is no more than 3%).
- One point is awarded for stocks with an investment value greatert than 100, where the investment value is the ratio of a weighted price rate-of-ascent to a weighted percentage lag value.
- One point is awarded for stocks with an "investment value rank" less than 1.5. The investment value first ranks the companies in the watchlist in ascending order based on the investment value and then compares this adjusted rank value with the three month price gain.
- One point is awarded for stocks that have risen at least 100% from their lowest price over the last three months.
- The average trading volume over the last 10 days of 10-day volume to three-month volume is compared. Those with a ratio that are above 1.25 are awarded one point; no points are awarded for ratios between 1.00 and 1.25; and one point is deducted for ratios of less than 1.00
- One point is awarded for a green / bullish point and figure pattern alerts on stockcharts.com, no points are awarded when there is no signal alert and one point is deducted when a red / bearish signal alert is shown. You will have to check this yourself on stockcharts.com by doing the following:
Go to stockcharts.com
Select "P&F Chart" from the drop down menu and enter the ticker you are interested in checking. Add or subtract the score to the tech tally points total in the table below.
Check out charts for all the stocks here.
Grant Henning's recommendation is based on the overall score as follows:
Strong Buy: +6
Sell: +3 or lower
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