Understanding the Fouda Score

The Fouda Score is a quantitative rating system that evaluates Egyptian stocks on a scale from 0 to 100. It combines multiple technical and momentum indicators into a single, easy-to-understand number. A higher score indicates a stronger current opportunity based on the model's criteria.

The score is built from four main pillars: Trend Strength (how aligned the stock is with its moving averages), Momentum (rate of price acceleration using RSI and MACD), Volume Confirmation (whether trading volume supports the price move), and Volatility (measuring risk-adjusted returns).

Each pillar contributes a weighted portion to the final score. Trend Strength carries the highest weight because historically, stocks in strong uptrends tend to continue their trajectory. Momentum acts as a confirmation signal — a stock trending up with accelerating momentum is more likely to sustain its move.

Volume Confirmation ensures the price movement has institutional backing. A stock rising on thin volume is less reliable than one rising with heavy trading activity. The Volatility component adjusts for risk — between two stocks with similar scores, the one with lower volatility is generally preferred.

Scores feed into a multi-factor decision engine that generates signals: BUY, WAIT, or AVOID. The signal is not based on the score alone — it also considers RSI levels, ADX trend strength, and volatility conditions. A high-scoring stock may still receive a WAIT or AVOID signal if momentum is overextended or volatility is too high. These signals update daily as new market data arrives. Remember, the score reflects current technical conditions — it is not a fundamental valuation or a price target.