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--- technical_indicators:sctr [2023/06/30 21:42]
jayanthi [Using SCTR]
+++ technical_indicators:sctr [2023/06/30 21:48]
jayanthi [Frequently Asked Questions]
@@ Line 125: / Line 125: @@
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-===== Conclusion =====
+===== The Bottom Line =====
 The StockCharts Technical Rank (SCTR) separates the wheat from the chaff. Relative strength is an important part of a successful trading or investing strategy. Based on the wisdom of John Murphy, SCTR allows chartists to compare the technical strength of one stock against all the stocks in its peer group. Chartists can also group stocks according to the technical rank. Stocks in the top 30% will have a technical rank of 70 or higher. Chartists can then focus on these relatively strong stocks for potential long positions on pullbacks. Conversely, chartists can use the technical rank to avoid weak stocks, such as those with a technical rank below 40. As far as new trends emerging, chartists can look for stocks with technical ranks moving out of the middle zone (40-60). A move above 60 would show relative strength improving, while a move below 40 would show an increase in relative weakness. As with all technical tools, SCTR should be used in conjunction with other aspects of Technical Analysis.
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-===== Frequently Asked Questions =====
+===== SCTR FAQs =====
-**Q: Why doesn't XYZ have a SCTR?** \\
+==== What is the significance of SCTR in a trading or investing strategy? ====
-A: Only those tickers included in predefined SCTR universe groups will have a SCTR ranking.
+The SCTR is a powerful tool for comparing the technical strength of one stock against all the stocks in its peer group. It separates the strong performers from the weak ones and is a significant part of a successful trading or investing strategy.
-**Q: The SCTR value has been the same for XYZ for a while now, why is that?** \\
+==== Are there any exclusions in the SCTR rankings? ====
-A:  That means it is consistently outperforming/underperforming its peers.
+Only ticker symbols in predefined SCTR universe groups will have a SCTR ranking. Leveraged and inverse ETFs are excluded from the SCTR rankings due to their above-average volatility and inverse movements that skew the results. The VIX ETF (VXX) is also excluded because it moves inverse to the S&P 500.
-**Q: How often are SCTRs updated?** \\
-A:  During the trading day, SCTRs are updated every 1-2 minutes.
+=== Why does the SCTR value remain the same for a while? ===
+When a SCTR value remains the same for a while, it means the stock or ETF is consistently outperforming/underperforming its peers.
+=== How often are SCTRs updated? ===
+During the trading day, SCTRs are updated every one to two minutes.
 ===== Additional Resources =====