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 five weighted factors: Trend Strength (how aligned the stock is with its moving averages), Momentum (rate of price acceleration using RSI and MACD), Volatility (measuring risk-adjusted returns), Relative Strength (performance against the EGX30) and Volume Confirmation (whether trading volume supports the price move).
Each factor 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.
This content is for educational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.