Methodology
Stock Analysis Methodology
How TechTars generates the daily 'why this stock moved' analysis: the data inputs, the technical signals we score, how the AI explanation is produced and reviewed, and the limits of the model.
Formula
Verdict = sign(SentimentScore + TechnicalScore + NewsImpactScore) · ConfidenceWeight
Variables
| Symbol | Name | Description |
|---|---|---|
| SentimentScore | News sentiment | Aggregate sentiment of headlines from the last 24 hours, weighted by source authority and recency. |
| TechnicalScore | Technical bias | Composite of RSI position, MACD signal, distance from 20/50-day MAs, and volume vs the 30-day average. |
| NewsImpactScore | News impact | Materiality of headlines (earnings, guidance, M&A, regulatory) weighted higher than routine coverage. |
| ConfidenceWeight | Confidence weight | Multiplier from 0 to 1 based on how aligned the three scores are with each other and with the day's actual price move. |
Worked example
If RSI is 72 (overbought, technical −1), MACD has just crossed bearish (technical −1), the 20-day MA was breached on 1.8x volume (technical −2), but the day's news flow is a strong earnings beat (sentiment +2, news impact +2), the composite is +0. The model returns Neutral with Medium confidence. The verdict reflects the conflict, and the 'what to watch next' surfaces both the technical breakdown and the post-earnings drift to monitor.
Assumptions and limitations
Every model leaves something out. Here is what this calculator assumes, and what it does not model, so you can interpret the output honestly:
- All inputs (price, volume, technical indicators, news headlines) come from publicly available sources via our data providers. We do not use insider information or private datasets.
- AI-generated prose passes a contract validator before display (must include the ticker, percent change, support/resistance, and a one-sentence reason). Stories that fail the validator are not shown, and users see a 'temporarily unavailable' state.
- The model does not predict future prices. It explains today's move and surfaces the data points to watch. It is not a buy/sell recommendation.
- Single-day analysis only. Multi-day trends, fundamental valuation (P/E, P/B, cash flow), and corporate-action timelines (dividends, splits, AGMs) are not modelled in the daily story.
- Sentiment scoring works best for high-coverage tickers. Small-cap stocks with thin news flow can produce lower-confidence verdicts, and these are flagged in the confidence breakdown.
Authoritative sources
Where the formula, rates, or framework come from: