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James Li
James Li
Articles (307)  | Author's Website |

New Feature: Screening for Companies Using Technical Indicators

You can now screen based on relative strength index, 6-month price index and simple moving averages

August 10, 2017 | About:

We are pleased to announce a new feature within our All-in-one Guru Screener: screening using technical indicators.

Background

Throughout the past several years, we have received multiple requests about screening based on technical indicators like the relative strength index and simple moving averages. We have now added these filters under the Screener’s Price tab as illustrated in Figure 1.

Figure 1

You screen for these filters as you would for any other filter. For example, if you want to look for companies with a 14-day relative strength index (RSI) less than 30, you would select the second drop-down menu for “14-Day RSI” and choose 30 from the list of values as Figure 2 illustrates.

Figure 2

How it works

We support screening for three types of technical indicators: the relative strength index (RSI), the six-month price index and the simple moving average. Each technical indicator can give insights on how a company’s stock price might trend going forward.

For example, you can look for undervalued companies using either the relative strength index (RSI) or the six-month price index. The former, according to Investopedia, determines whether a company's stock is “overbought” or “oversold.” RSI values of 70 or above suggest possible overvaluation while RSI values of 30 or below suggest possible undervaluation.

The price index, on the other hand, highlights the stock’s price trend over the past six months. A price index less than 1 indicates the company’s share price declined during the six-month period, which can either lead to a value opportunity or a potential value trap depending on the company’s profitability.

Undervalued predictable companies have outperformed the S&P 500 benchmark in at least five of the past five years according to the GuruFocus model portfolio page. The following “RSI Value Opportunities” screener combines several of Warren Buffett (Trades, Portfolio)’s investing criteria with technical indicators that indicate possible undervaluation. The filters include:

Six companies, including Brocade Communications Systems Inc. (NASDAQ:BRCD), Gentherm Inc. (NASDAQ:THRM) and West Pharmaceutical Services Inc. (NYSE:WST), made the “RSI Value Opportunities” screener as of Aug. 10.

See also

Before we introduced “technical indicator screening,” the only place that included technical indicators was the Interactive Charts. We also added a new feature that allows you to change the price chart to a candlestick chart, an over-high-low-close (OHLC) chart or an area / mountain chart.

Disclosure: The writer has no positions in the stocks mentioned.

About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


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Comments

Marcelo Sommer
Marcelo Sommer premium member - 2 months ago

Very good!!! If the Fundamental Analysis is so important to give us good firms to buy, the Technical Analysis allow us to identify momentum, catch the timing to take advantage of the trends, and make swing trade or trade options, in way to foster a better performance.

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