StockViz Model I
An Open Stock Recommendation Model
StockViz Model I is a stock analysis model that analyzes past price action and 15 other technical data-points to deliver daily buy and sell recommendations. Model I is the first in a series of trading models that StockViz plans to roll out in the future. It is aimed at the active investor who is looking for an unbiased, transparent and methodical starting point.
Methodology trumps Instinct
Success in the markets requires discipline and methodology. Methodology is nothing but a defined decision making process that is a simple and uncomplicated way of looking at the markets. Discipline is the ability of the investor to stick to a specific methodology – the patience and persistence to follow the model.
Model I is a simple technical analysis based program that evaluates a universe of 160 stocks listed in the National Stock Exchange (NSE) on a daily basis and outputs a list of 3 stocks that are expected to rise in value (Bullish) and 3 that are expected to fall in value (Bearish) over the next week or two. By adopting Model I, investors will have a basic framework for decision making that they previously relied on various talking heads on CNBC, MoneyControl, etc. to provide.
Model I Basics
Model I uses a combination of 15 technical signals to evaluate a stock. The process is, for every stock,
- Use VHF to check if the stock is trending or consolidating
- If it is trending apply the following filters
- RSI
- SMA
- Stochastic Fast & Slow
- MACD
- CMF
- SMI
- If it is consolidating apply the following filters
- Aroon
- Chande
- Momentum
- Bollinger Bands
- Assign a +1 to every bullish signal and a -1 to every bearish signal. Add the two to get a rank.
Conclusion
The simplicity of StockViz Model I trumps “gut” trading and following prognostications by TV pundits, in our opinion. Future versions will necessarily get more complicated. However, we believe that a simple and open model trumps an opaque opinion.
See the model in action on our Tips page.