Glossary

The terms you will find across Ticker&Tape, in plain words

Charts, ratings and setups come with their own vocabulary. Here is what each term means on Ticker&Tape. For the exact formulas behind every rating, see the Methodology.

A

A/D lineBreadth

The running total of advancing minus declining stocks, day after day. A rising line means most stocks are joining the move, not just the biggest names.

AntsChart

Dots on the chart when a stock closed up in at least 12 of the last 15 sessions on volume at least 20% above its 50-day average. They turn gold when the stock also gained 20% or more in those 15 days: a sign of steady institutional buying.

B

BaseSetups

A period of sideways or corrective trading, at least 5 weeks long, measured from the stock's highest high of roughly the last 65 weeks. Most big moves start from a sound base.

BreakoutSetups

A close above the pivot, ideally on heavy volume. On Ticker&Tape the status stays Breakout while the stock is no more than 5% above the pivot.

Buy pointSetups

See Pivot.

Buy zoneSetups

From the pivot up to 5% above it: the normal range to buy a breakout. Past that, the stock is Extended.

C

Composite RatingRatings

One number from 1 to 99 that blends EPS growth (counted double), the RS Rating, the industry group rank, the SMR Rating and the distance from the 52-week high.

CorrectionMarket

The market's weakest phase: the index is 8% off its peak, or has piled up distribution days while below its 50-day line. Most breakouts fail here.

CupSetups

A base 15% to 50% deep with a rounded bottom, without a handle, trading within 10% of its high.

Cup with handleSetups

A cup followed by a short pullback of 2% to 15% in the upper half of the base, lasting up to six weeks. The pivot is the high of the handle.

D

Deep correctionSetups

A pullback of more than 50% from the high. Not a buyable base.

Distribution dayMarket

The index falls 0.2% or more on higher volume than the day before: a sign that large investors are selling. It counts for 25 sessions, or until the index rises 5% above that close.

E

EPS growthFundamentals

Earnings per share in the latest quarter compared with the same quarter a year earlier. Leaders usually show strong and accelerating growth.

ExtendedSetups

More than 5% above the pivot: past the normal buy range, where the risk of a pullback is higher.

F

Failed breakoutSetups

A stock that broke out and then closed more than 3% below the pivot.

Flat baseSetups

A tight base no more than 15% deep, often forming after a prior advance.

Follow-through dayMarket

On day 4 or later of a rally attempt, a gain of at least 1.25% on higher volume. It confirms a new uptrend.

H

HandleSetups

The short, shallow pullback on the right side of a cup that shakes out weak holders before a breakout.

I

Industry group rankRatings

Every GICS sub-industry ranked by the average relative strength of its stocks. Rank 1 is the strongest group. Most big winners come from the top groups.

M

Market directionMarket

The current phase of the S&P 500 and the Nasdaq, read from price and volume: Uptrend, Uptrend under pressure, Rally attempt or Correction.

McClellan oscillatorBreadth

The 19-day minus the 39-day average of ratio-adjusted net advances. Above zero, breadth is improving; below zero, it is weakening.

Moving averagesChart

The 21-day exponential and the 50- and 200-day lines on every chart. Leaders tend to stay above their 50-day line and find support near it.

N

New highs and lowsBreadth

How many stocks hit a new 52-week high or low on the day. More highs than lows is a healthy market.

P

PivotSetups

The buy point of a base: the high of the handle, or of the left side when there is no handle, plus $0.10.

R

Rally attemptMarket

Begins with the first up day after a market low. It needs a follow-through day to turn into a confirmed uptrend.

RS lineRatings

The stock's price divided by the S&P 500. A rising line means the stock is beating the market; a new high in the RS line ahead of the price is a sign of leadership.

RS RatingRatings

Relative strength from 1 to 99: the stock's 12-month price performance, with the latest quarter weighted double, ranked against every stock covered. 80 and up is leadership territory.

S

SMR RatingRatings

A grade from A to E for Sales growth, profit Margins and Return on equity.

StopSetups

The price at which to cut a loss. Trade ideas show a stop 7% below the pivot, the classic maximum loss on a new position.

U

Up/down volumeChart

Volume on up days divided by volume on down days over the last 50 sessions. Above 1 points to accumulation; below 1, to distribution.

Uptrend under pressureMarket

The market is still in an uptrend but shows 5 or more distribution days, or the index is below its 50-day line. A time to be selective.