Fouda Score Methodology
Full transparency on how we evaluate and rank Egyptian stocks.
How the Fouda Score Works
The Fouda Score is a quantitative rating from 0 to 100 that evaluates each stock listed on the Egyptian Exchange. It combines weighted technical factors into a single actionable number, plus an observational microstructure factor that we track separately while it remains in calibration. The score is updated daily after each trading session. The model is purely technical, it does not factor in fundamental data like earnings or P/E ratios.
Model Factors, weighted and observational
Trend Strength
25%Measures alignment with key moving averages (20, 50, 200 day). A stock trading above all three MAs with the shorter above the longer scores highest. This captures the direction and strength of the stock's overall trend.
Price Momentum
25%Evaluates the rate of price acceleration using RSI and MACD indicators. Strong upward momentum with RSI between 40-70 scores well. Overbought (RSI > 75) or oversold (RSI < 30) conditions trigger adjustments.
Volatility Control
20%Measures risk-adjusted returns. Lower volatility relative to returns is preferred. Stocks with high ATR (Average True Range) relative to price get penalized. This helps identify stocks that are rising steadily rather than chaotically.
Relative Strength
15%Compares the stock's performance against the EGX30 index over 20 and 50 days. Stocks outperforming the market score higher. This identifies market leaders regardless of the overall market direction.
Volume Confirmation
15%Checks whether price movements are supported by trading volume. A price increase on above-average volume (>1.5x 20-day average) is more reliable than one on thin volume. This confirms institutional interest.
Microstructure
In calibrationCombines four daily-bar sub-signals tuned for EGX behaviour: accumulation detection (tight ranges + stable volume + weak red-day volume), liquidity vacuums (volume dry-up + range contraction near resistance), seller exhaustion (consecutive red candles with declining volume holding support), and Bollinger-band squeeze percentile-ranked over 120 days. A volume-spike signal (>2.5x 20-day average) flags smart-money interest as a side flag.
Tracked and surfaced on the trading-pressure pages, but not part of the composite score until calibration completes.
Signal System
The Fouda Score feeds into a multi-factor classification engine that produces descriptive signals. Signals consider not just the score, but also RSI levels, ADX trend strength, volatility conditions, and the overall market regime. All signals are technical indicators for educational purposes only and are not buy or sell recommendations.
Market Regime Adjustment
The model analyzes the EGX30 index to determine the overall market state: Bullish, Bearish, Strongly Bearish, or Neutral. In bearish markets, positive signals are automatically downgraded to protect investors from entering a declining market. This regime adjustment overrides individual stock signals when the market conditions are unfavorable.
Financial analysis: how it is calculated
The financial analysis reads the company's official financial statements published on the Egyptian Exchange. Every company figure shown must be read from those statements with a balanced balance sheet; a missing figure is never estimated: the dimension that needs it uses the alternative described below when it has one, and is otherwise withheld. When the full annual statements are not available, the prior year's profit is taken from the company's official results notice, and the page says so. Multiples use the share price on the calculation date.
Each company is analysed with its sector's model, because the same ratio means different things in different sectors.
The score runs from 0 to 100 and is a weighted average of five dimensions:
- Price vs value: one multiple, chosen by sector:
- Price to book (P/B): Banks, Insurance, Non-bank lending, Investment holding companies and Real estate.
- Price to earnings (P/E): Financial services, Consumer goods, Pharmaceuticals and Technology and payments.
- Enterprise value to EBITDA (EV/EBITDA): Industry and operations and Asset-heavy services.
- Profitability: return on equity, averaged with the net profit margin for Financial services, Industry and operations, Consumer goods, Pharmaceuticals, Asset-heavy services and Technology and payments (when one of the two is missing, the dimension uses the other alone).
- Growth after inflation: growth in operating profit when the statements print it for both periods, otherwise net profit (always net profit for Banks, Insurance, Non-bank lending, Investment holding companies and Real estate), from the start of the fiscal year against the same period a year earlier, after deducting official inflation (for companies reporting in US dollars, growth in dollars). It is withheld when last year's profit was zero or a loss, or when growth before inflation exceeds 300%, because the figure then reflects a base effect rather than growth.
- Financial health: by sector: net debt to equity, net debt to EBITDA, or equity to assets.
- Fifth dimension: for Banks, Insurance, Non-bank lending, Financial services, Investment holding companies and Real estate, how stable profits have been over the years (it needs at least 4 consecutive years); for Industry and operations, Consumer goods, Pharmaceuticals, Asset-heavy services and Technology and payments, how much of the profit turns into cash.
| Sector | Price vs value | Profitability | Growth | Financial health | Fifth dimension |
|---|---|---|---|---|---|
| Banks | 30% | 30% | 15% | 15% | 10% |
| Insurance | 30% | 30% | 15% | 15% | 10% |
| Non-bank lending | 30% | 30% | 20% | 0% | 20% |
| Financial services | 30% | 25% | 20% | 10% | 15% |
| Investment holding companies | 35% | 20% | 5% | 25% | 15% |
| Real estate | 30% | 10% | 15% | 30% | 15% |
| Industry and operations | 25% | 20% | 15% | 20% | 20% |
| Consumer goods | 25% | 20% | 25% | 10% | 20% |
| Pharmaceuticals | 25% | 25% | 20% | 15% | 15% |
| Asset-heavy services | 25% | 15% | 15% | 25% | 20% |
| Technology and payments | 20% | 15% | 30% | 15% | 20% |
When a company's activity is limited or a dimension is missing, the ratios are shown without an overall score. Banks and insurers, for example, have no overall score yet, because capital adequacy and the solvency margin have not been read from the notes.
Bands:
- 75 or above: strong financial profile.
- 60 to 74: solid.
- 45 to 59: average.
- Below 45: weak.
A company with a loss over the last 12 months scores no more than 45, whatever its other dimensions. A company with negative equity shows its ratios without an overall score, because price vs value is not calculated for it.
Any dimension other than price vs value scoring 72 or more is shown as a strength, and any below 45 as a point to watch.
These weights and thresholds are the first version of the methodology (v1.0). The weights reflect how much each dimension matters in the nature of each sector, and the thresholds were set after reviewing the figures of companies in the Egyptian market. Like any analytical method, they are one choice among possible ones, not an absolute measure.
For companies reporting in Egyptian pounds, the average one-year treasury bill yield over the same 12 months is shown beside return on equity. It is context for the alternative return only and is not part of the score.
The analysis is descriptive and educational, not a recommendation to buy or sell.
How do we calculate trading pressure?
The "Trading Pressure" and "Pressure Archive" pages surface actionable numbers, but you need to understand exactly what they measure before acting on them. This is the full-transparency section.
The accounting truth
In any market trade, the buyer pays exactly what the seller receives. The accounting net of money "entering" or "leaving" a single stock is therefore always zero. The notion of "liquidity flowing into stock X" does not exist in an accounting sense, money changes hands between two parties; it is not created or destroyed.
So what do we actually measure?
We use a well-established market-microstructure technique called the Lee-Ready algorithm (1991). It classifies pressure direction from minute-by-minute price movement:
- When price rises during a minute with notable volume → we log that minute's traded value as "buy pressure" (buyers were the aggressor).
- When price falls during a minute with notable volume → we log it as "sell pressure".
- Quiet minutes that don't cross the detector's threshold are ignored (it's a filter, not the whole market).
Accuracy and limitations
- This method agrees with actual order-flow imbalance ~75-85% of the time in liquid markets (per academic studies).
- It does not distinguish institutional vs retail trades, or foreign vs Egyptian investors.
- If COMI shows "buy pressure 62M and sell 0" that means every alerted minute had rising price, not that 62M "entered" the stock.
- Bloomberg Terminal and Refinitiv Eikon use the same methodology (with more granular tick-level data), it is the strongest proxy from publicly available market data.
Want actual flow measurement?
The Trading Summary page surfaces EGX’s official investor-flow data at the market level: foreigners vs Egyptians, individuals vs institutions, with real buy/sell/net values. That is the only genuine measurement of “liquidity flow” between investor categories, but it’s published market-wide, not per individual stock.
Important Disclaimer
The Fouda Score and all signals are quantitative analysis tools for educational and informational purposes only. They do not constitute investment advice, financial recommendations, or a solicitation to buy or sell any securities. Past performance does not guarantee future results. Always do your own research and consult a licensed financial advisor before making investment decisions.
Frequently asked questions
What is the Fouda Score?
The Fouda Score is a quantitative rating from 0 to 100 that evaluates each EGX stock based on 5 technical factors: Trend strength (25%), Momentum (25%), Volatility control (20%), Relative strength (15%), and Volume confirmation (15%).
Is the Fouda Score financial advice?
No. The Fouda Score is a quantitative analysis tool for educational and informational purposes only. It does not constitute investment advice or guarantee profits. Investment decisions are your personal responsibility.
How are signals calculated?
Signals are produced by a classification engine combining the Fouda Score, RSI levels, ADX trend strength, and market regime. A high-scoring stock may receive a neutral signal if momentum is overextended. All signals are descriptive technical classifications for educational purposes only, not buy or sell recommendations.
What is Market Regime and signal adjustment?
The EGX30 index is analyzed to determine the market state (bullish, bearish, neutral). In bearish markets, positive signals are automatically downgraded to reflect the broader market state.