|
Stock screening is the process of finding stocks that meets an investor's selection criteria.
Stock screening can be done based on either fundamentals or technical analysis.
Fundamental stock screening attempts to find companies matching a specific financial profile. Investors may screen stocks based on factors such as price, market cap, and balance sheet ratios. Stock screening can also involve finding companies that have met predetermined technical thresholds. Investors may build stock screens to look for companies making new highs or lows, trading in narrow ranges, or have achieved certain levels with technical indicators such as RSI, ADX, stochastics, etc.
It is important to note that stock screening does not imply a stock will move in the desired direction; it merely says a stock meets the criteria set by the investor doing the stock screening. Once done manually, stock screening is now generally done by computer. Many brokers and web sites provide stock screening software tools. |
