How calls and zones are produced
The call on a stock comes from a fixed scoring rule, not from a model's opinion. The inputs, the thresholds and where each price zone comes from.
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Each covered stock has a call: add, hold, trim, watch or avoid. It is rebuilt when the research job runs, and only when the evidence or the price picture changed. The report shows the date of the call.
Two stages
- Stage one, the evidence. A model reads the dated sources for the stock (news, filings, results) and writes a structured summary: the drivers, the risks, the direction of the news and whether a hard catalyst is present. This is the only stage where a model is involved.
- Stage two, the call. A fixed rule turns that summary and the market data into a score, and the score into a call. No model is involved. The same inputs always give the same call.
What goes into the score
| Input | Effect |
|---|---|
| Overall read of the evidence | The starting point, positive or negative. |
| Setup | Breakout, trend and accumulation add. Exhaustion subtracts. |
| Drivers and risks | Each driver adds or subtracts by its strength. Each listed risk subtracts. |
| News direction | Positive news adds, more if there is a hard catalyst. Negative news subtracts about twice as much. |
| Evidence over several days | The same theme building over days counts for more than one day's news. |
| An unusual move with an explanation | A confirmed rise adds a little. A confirmed fall subtracts more. |
| Options activity | Very high implied volatility or heavy put buying subtracts. |
| Against the market | Beating or lagging the market that day nudges the score. |
Bad news is weighted more heavily than good news throughout. That is deliberate: we would sooner be late to add than late to step back.
From score to call
| Call | When | What it means |
|---|---|---|
| Add, now | Score of 24 or more and the trend has not broken down | The evidence is clearly positive. |
| Watch for a breakout | Score of 10 or more and the price is breaking out | Positive, waiting for the price to confirm. |
| Add, on a pullback | Score of 8 or more | Positive, but better bought lower, at the add zone. |
| Hold | Score between the thresholds | No strong case either way. |
| Trim | Score of −10 or less, or the trend has broken down | The evidence has weakened. Do not add here. |
| Avoid | Score of −24 or less | The evidence is clearly negative. |
The guard against chasing
An add call is changed from now to on a pullback when the stock has already run: more than 12% above its recent low with a fast recent rise, or with crowded call buying or very high implied volatility. The rule never says add now after a hot run.
Confidence
High, medium or low. It is high only when the score is far past a threshold and the evidence spans more than one day. When we have no reliable current price for a stock, the call is watch with low confidence and no zones are set.
Where the zones come from
| Zone | Source, in order of preference |
|---|---|
| Add below | The highest of: support from the last few sessions, a put wall below the price, the lower edge of the options-implied move. If none exists and the call is add, 3% below the price. |
| Add above | For a breakout call: a call wall above the price, or 3% above the price. |
| Trim above | The analyst consensus target when it is more than 12% above the price. Otherwise 18% above the price. |
| Near-term resistance | A call wall or the upper edge of the options-implied move, when it is meaningfully above the price. |
- Zones come from market structure and analyst data. A model does not pick price levels.
- An avoid call has no trim zone.
- The percent fallbacks are plain rules of thumb. A zone built from a fallback is weaker evidence than one built from a real level.
What a call is not
- It is not a forecast of the price.
- It is not sized for you. It does not know what else you hold.
- It is not a track record. We do not publish a win rate for calls, because we have not yet measured one in a way we would stand behind.
Who sees what
The call, its reasons, what would change it, its date and what changed since the last one are shown to every reader, signed out included. The price zones and the whole brief are shown on Pro, on the stocks a Free account covers, and to everyone on a small set of showcase stocks. See Free vs Pro.
Read next
- What is written by a model and what is notA plain list of which parts of the product a language model writes, which parts are arithmetic or copied from a source, and how the two are kept apart.
- How to read a stock reportThe report runs from the call at the top to the raw evidence below it. Every panel names its source and the time it is from.
- Where the data comes from and how fresh it isEvery data set in the product, its source, how to tell how old it is and what it does not cover.
Something here wrong or unclear? Tell us. Informational only, not investment advice.