Do technical indicators replace fundamental screening criteria?

No — they answer a different question. Fundamental criteria like PE ratio or dividend yield relate to a business's underlying value; technical indicators describe price and volume patterns. Many investors use fundamentals to decide what to look at, and technicals to think about timing.

What does RSI actually measure?

The Relative Strength Index measures how fast and how much a stock's price has moved recently, on a scale of 0 to 100. It's commonly used to flag when a stock may be overbought or oversold relative to its own recent trading range — not to judge whether the business is a good one.

What's the difference between a moving average and the current price?

A moving average smooths out day-to-day price noise by averaging price over a set period (like 50 or 200 days). Comparing the current price against its moving average is a common way to gauge whether a stock is trending above or below its recent average level.

Is technical screening reliable on its own?

Technical indicators describe what price has already done, not what a company's business is worth — used alone, they say nothing about whether a stock is fundamentally sound. Most practical approaches combine technical filters with fundamental ones rather than relying on either alone.

Technical Indicators as Screening Criteria: A Beginner's Guide

This page presents educational screening criteria and worked examples only — not investment advice or a recommendation to buy or sell any security.

Fundamental screening vs. technical screening

Everything covered in most of this site’s screening guides — PE ratio, dividend yield, debt-to-equity — is fundamental screening: it filters on the underlying business and its financial statements. Technical screening filters on something different entirely: the stock’s own price and trading-volume history. The two aren’t competing approaches so much as answers to two separate questions — “is this a sound business” versus “what has this stock’s price actually been doing.”

Moving averages: is the price above or below its own trend

A moving average takes a stock’s closing price over a set number of days — 50 and 200 are common choices — and averages them, smoothing out the day-to-day noise of individual price swings. Comparing the current price against its own 50-day or 200-day average is a common way to gauge whether a stock is currently trading above or below its recent trend, without needing to interpret a full price chart by eye.

A stock crossing above its own longer-term moving average is sometimes used as a signal that a trend may be shifting — though a single crossover on its own is a weak signal, and it says nothing about whether the underlying business supports that move.

RSI: has the price moved too far, too fast

The Relative Strength Index compares the size of a stock’s recent gains against its recent losses over a set period, expressed as a number between 0 and 100. Values above roughly 70 are commonly read as “overbought” — the price has risen quickly relative to its recent range — and values below roughly 30 as “oversold.” These are conventions, not fixed rules, and a stock can stay in overbought or oversold territory for an extended period during a strong trend.

Volume: is a price move actually backed by activity

Trading volume — the number of shares changing hands — is often checked alongside price movement rather than on its own. A price move on unusually high volume is generally read as more significant than the same move on thin trading, since it reflects a broader shift in how many market participants are actually acting on the stock, rather than a handful of trades moving a thinly-traded price.

Combining technical filters with fundamental ones

A practical approach many investors use is fundamentals-first: screen for financially sound companies using criteria like the ones in how to find stocks by screening criteria, then apply a technical filter only to that shortlist — for instance, checking whether a fundamentally sound stock is currently trading below its 200-day moving average, which some investors treat as a more attractive entry point than buying at a recent high.

What technical indicators can't tell you

None of these indicators say anything about whether a business is well-run, well- financed, or fairly valued — they describe price behaviour, not business quality. A stock can show every bullish technical signal available and still be a company with deteriorating fundamentals underneath. Treating technical and fundamental screening as two separate filters, rather than expecting one to substitute for the other, tends to avoid this trap.

Sources

This page summarises publicly available guidance on technical indicators. It is not written or reviewed by a named stockscreener.asia team member — for a fuller breakdown of individual indicators, refer directly to the primary source below.

Moomoo — A Complete Guide to Technical Indicators