StockCharts Technical Rank (SCTR)

DEFINITION of 'StockCharts Technical Rank (SCTR)'

A numerical ranking for individual stocks in different groups - large cap, mid cap, small cap, U.S. ETFs and Toronto stocks - showing the stock's overall strength based on six technical indicators covering various timeframes. It is also known as the Channellines Technical Rank.

The StockCharts Technical Ranking (SCTR) was created by John Murphy, a technical analyst and author, and is available on StockCharts.com. It is created using the following formula and weightings:

Long-Term Indicators (weighting)
Percent above/below 200-day SMA (30%)
125-Day Rate-of-Change (30%)
 
Medium-Term Indicators (weighting)
Percent above/below 50-day SMA  (15%)
20-day Rate-of-Change (15%)
 
Short-Term Indicators (weighting)
 3-day slope of PPO-Histogram (5%)
 14-day RSI (5%)

BREAKING DOWN 'StockCharts Technical Rank (SCTR)'

Investors choose the group they wish to analyze, which provides a list of stocks within that group ranked from 0 to 99.99. A score of 99.99 means the stock is performing extremely well compared to its peers. 0 is the weakest score, indicating the stock is severely underperforming its peers in the group.

Traders typically want to buy strong stocks, or stocks increasing in SCTR ranking, while selling or shorting stocks that have a weak SCTR ranking.

The SCTR formula covers different timeframes, and a stock must score well on all of them to receive a high score. The most weight is given to the longer-term indicators, since the long-term trend is a more dominant force than short-term fluctuations.

The SCTR compares a stock to its peers, not to a specific benchmark such as the S&P 500 index.