Five Indicators, One Score: How Saxon Alpha Rates Every Stock
Every trading day before the market opens, Saxon Alpha analyzes over 500 stocks across the S&P 500 and Nasdaq-100. Each stock gets a score from 0 to 5 that translates into a clear signal: BUY, HOLD, or SELL.
Here's exactly how it works. No black boxes.
The Five Indicators
Each indicator contributes one point to the score. A stock earns a point when the indicator is bullish, and doesn't when it's bearish. Simple as that.
RSI (Relative Strength Index) +1 point
Bullish when RSI is below 40. This means momentum has pulled back and the stock may be setting up for a move higher. We use a lower threshold than the traditional 30 because we're looking for early opportunities, not extreme oversold conditions.
MACD Histogram +1 point
Bullish when the histogram is positive. The MACD histogram shows whether short-term momentum is accelerating above or below the longer-term trend. Positive means the stock's momentum is building upward.
Moving Average Alignment +1 point
Bullish when price > 50-day MA > 200-day MA. This is the classic "golden" alignment. When the short-term average is above the long-term average and price is above both, the stock is in a confirmed uptrend at every timeframe.
Volume Ratio +1 point
Bullish when volume is 1.2x above the 20-day average. Elevated volume means institutional players are active. Moves on high volume tend to be more sustainable than moves on thin volume.
Relative Strength vs. SPY +1 point
Bullish when the stock is outperforming the S&P 500. We compare each stock's 20-day return to SPY's 20-day return. Positive relative strength means the stock is beating the market, not just riding it.
From Score to Signal
The five points add up to a score from 0 to 5, which maps directly to a signal:
A score of 4 or 5 means at least four of the five indicators are bullish — that's a high-conviction BUY. A score of 0 or 1 means almost everything is bearish — a clear SELL.
The middle ground (2-3) is HOLD territory. The indicators are mixed, and the smart move is usually to wait for clarity.
Ranking Within Signals
Not all BUY signals are equal. A 5/5 with strong momentum and high volume is a better opportunity than a 4/5 with borderline indicators.
That's why Saxon Alpha also generates a composite ranking within each signal tier. We weight the indicators (30% RSI, 25% MACD, 25% volume, 20% relative strength) to rank stocks from strongest to weakest within each group.
The result: the very best opportunities appear at the top of the list. You're not just seeing what to buy — you're seeing what to buy first.
Then AI Explains It
Numbers are useful. Understanding is better.
Click any stock in Saxon Alpha and our AI analyst writes a plain-English breakdown of what all five indicators mean for that specific stock, right now. No jargon. No guessing. Just a clear explanation of what the data is telling you.
Example: "META's SELL signal at 0/5 reflects broad technical weakness. MACD at -2.47 signals strong bearish momentum, while -8.8% relative strength shows significant underperformance vs. the S&P 500. Volume at 0.9x suggests institutional indifference. Watch the 50-day MA at $600 as key support."
That's the kind of analysis that used to require a Bloomberg Terminal and a finance degree. Now it's one click.
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