What is a Stock Screener?
Stock Screener is a tool that helps you quickly filter through thousands of stocks in the entire market based on preset criteria to find candidates that meet your requirements.
According to Schwab (2024) research, stock screening is the first step in technical stock selection. The goal is to narrow down to 20-25 candidates, then perform chart pattern analysis on each one. You can also use the platform's Stock Radar to automatically screen for qualifying candidates.
Ten Core Screening Criteria
Criterion 1: P/E Ratio
P/E Ratio is the most commonly used valuation metric, reflecting how much investors are willing to pay for each dollar of earnings.
| P/E Range | Rating |
|---|---|
| < 15 | Undervalued, potentially a value stock |
| 15-25 | Reasonable valuation |
| 25-35 | Reasonable for growth stocks |
| > 35 | Overvalued, be cautious |
Note: P/E varies significantly across industries. Tech stocks typically have higher P/E, so compare within the same industry.
Criterion 2: EPS Growth
EPS Growth reflects the growth rate of a company's profitability. According to Mark Minervini (2013), earnings growth is one of the most important fundamental indicators for selecting strong stocks.
Recommended condition: Consistent EPS growth over the past 5 years, or EPS growth > 15% over the past year
Criterion 3: Average Daily Volume
Volume is key to ensuring a stock has sufficient liquidity. With stocks that have too low volume, you may be forced to stop out at unfavorable prices.
Recommended condition: Average daily volume > 200,000 shares, or average daily turnover > $1M
Criterion 4: Market Capitalization
Market Cap affects a stock's liquidity and volatility.
| Market Cap Range | Characteristics |
|---|---|
| > $10B | Large blue chips, extremely high liquidity |
| $1-10B | Mid-cap, good liquidity |
| $100M-1B | Small-cap, high volatility, higher risk |
| < $100M | Micro-cap, be cautious |
Criterion 5: 52-Week Price Range
52-Week Range helps you identify a stock's current price position. Stocks at or near 52-week highs are typically the strongest.
Recommended condition: Stock price at 80% or above of the 52-week range
Criterion 6: Relative Strength (RS Rating)
Relative Strength measures a stock's performance relative to the broader market over the past year. An RS Rating of 80 or above means it has outperformed 80% of stocks.
William O'Neil in "How to Make Money in Stocks" (1988) pointed out that over 95% of strong stocks had an RS Rating above 70 before their pattern breakout. For more RS guidance, see Relative Strength RS Guide.
Criterion 7: Sector/Industry Classification
Different industries have different valuation standards and cycle characteristics. It is recommended to first determine which sector you want to invest in, then screen within that sector.
Hong Kong stock sectors to watch in 2026:
- Technology Innovation: AI, semiconductors
- Consumer Upgrade: E-commerce, local services
- New Energy: EV industry chain
Criterion 8: Dividend Payout Ratio
Dividend Payout Ratio is the proportion of earnings paid out as dividends. Companies with stable dividends and reasonable payout ratios (30-60%) are financially healthy.
Criterion 9: Book Value
Book Value is the value of a company's assets minus liabilities. A P/B ratio below 1 may indicate undervaluation, but industry characteristics must also be considered.
Criterion 10: Debt Level
Debt Level is an important indicator for assessing a company's financial risk. Companies with high debt-to-equity ratios are riskier in a rising interest rate environment.
Screening Process Recommendations
Phase 1: Fundamental Screening (Narrow to 50-100 stocks)
- P/E < 30
- 5-year EPS growth > 10%
- Market Cap > $1B
- Reasonable dividend payout ratio
Phase 2: Technical Screening (Narrow to 20-30 stocks)
- Price > 20-day moving average
- RS Rating > 70
- Average daily volume > 500,000 shares
- Near 52-week high
Phase 3: Pattern Confirmation (Confirm 3-5 stocks for entry)
- Review chart patterns one by one
- Confirm volume support
- Set entry, stop-loss, and target prices
Recommended Screener Tools
TradingView (Recommended)
TradingView is currently the most popular stock screening platform, with powerful charting tools and community sharing.
Pros:
- Powerful charting tools
- Community allows following other investors
- Supports custom screening criteria
Cons:
- Advanced features require paid version
Finviz
Finviz is the industry standard for US stock screening, offering fast, free screening functionality.
Pros:
- Completely free
- Fast screening
- Direct chart links
Cons:
- Primarily for US stocks
Finbox
Suitable for fundamental investors, offering extensive financial data and valuation metrics.
Common Mistakes
Mistake 1: Too Many Criteria
Setting too many screening criteria will result in no stocks being selected. Start with 2-3 most important criteria and gradually add more.
Mistake 2: Using the Same Standards Across Industries
Tech stocks and utility stocks have very different P/E, market cap, and liquidity requirements. Compare within the same industry.
Mistake 3: Looking at Only One Indicator
Don't make decisions based on a single indicator. Combine multiple fundamental and technical indicators.
Summary
Core principles of stock screening:
- Broad to narrow — Start with a wide range, then gradually narrow down
- Fundamentals + Technicals — Combine both, don't rely on a single dimension
- Pattern confirmation — Review charts one by one after screening
- Continuous optimization — Adjust screening criteria based on actual performance, and refer to the Strategy Center for more stock selection strategies
Use in conjunction with Cup and Handle patterns and VCP patterns to improve stock selection accuracy.