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Scenario analysis is a technique that evaluates multiple possible outcomes for a stock before you invest. Instead of predicting a single target price, you prepare for bullish, sideways, and bearish scenarios — each with its own probability, entry point, target, and stop loss.
The FoudaLens Scenarios engine builds three investor profiles: Speculator (short-term, aggressive), Short-Term Trader (weeks to months, moderate risk), and Long-Term Investor (months to years, conservative). Each profile gets a Scenario Score (0-100) based on five analytical layers.
Layer 1 — Market Regime: Is the overall market (EGX30) in a bull, bear, or sideways trend? This sets the context. Trading long in a bear market requires higher conviction. Layer 2 — Pipeline Score: Technical analysis of the individual stock across trend, momentum, volume, volatility, and valuation.
Layer 3 — Volatility Squeeze Detection: When Bollinger Bands narrow significantly, a big move is coming. The system detects squeezes and adds a "Breakout Potential" flag. Layer 4 — Smart Money / Accumulation: Tracks whether institutional investors are quietly buying (accumulation) or selling (distribution).
Layer 5 — Liquidity Vacuum: Identifies price zones with low trading activity where price can move rapidly. This helps set realistic targets and avoid zones where your order might not execute easily.
How to use scenarios practically: (1) Open the scenarios page for your stock. (2) Check the Market Regime badge — is the market supporting your direction? (3) Review the three scenarios (bullish, sideways, bearish) and their probabilities. (4) Match the investor profile to your style. (5) Use the suggested entry, target, and stop loss levels.
The projection chart shows all three paths visually. Use the period selector (60d, 4m, 6m, 1y) to zoom in or out. The key is not to predict which scenario will happen, but to have a plan for each one. If the bullish scenario plays out, you know your target. If bearish, you know where to exit. This is not financial advice.
This content is for educational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.