What is a surge stock scanner?
— Principles and limitations of capturing surges in US stocks
How the scanner automatically filters over 6,000 US stocks daily, the reason for disclosing the hit rate and limitations will be explained honestly.
Definition of Surge Stock Scanner
A surge stock scanner is a tool that automatically filters stocks that pass pre-defined technical conditions. DawnScan automatically screens all NASDAQ and NYSE stocks (6,000+) after market close daily to present the top 10 stocks that correspond to pre-breakout early signals.
Here, "pre-breakout early signals" refer to stocks that are not already rising but are in a preparatory state just before a technical breakout. For detailed signal descriptions, please refer to How to Find Expected Surge Stocks in the US — 5 Pre-Breakout Signals.
Automatic Screening Pipeline
- Universe Composition — Daily collection of OHLCV data for all NASDAQ and NYSE listed stocks (6,000+)
- Filtering — Removal of stocks with trading suspensions, delistings, or extremely low trading volumes
- Indicator Calculation — Calculation of multiple indicators such as Bollinger Bands, OBV, RSI, ADX, and relative strength
- Scoring — Assigning weighted scores for each signal and summing them up
- TOP10 Extraction — Selecting the top 10 stocks based on scores
- AI Reason Generation — LLM describes the scoring factors for each stock in Korean
Scoring Indicators
- Bollinger Squeeze — Band width at a 52-week minimum → points for volatility contraction
- OBV Trend — OBV rising during price consolidation → points for accumulation
- RSI Range — 40~55 points for pullback / 82+ penalty for overheating
- Relative Strength (RS) — Outperformance compared to S&P 500 → points
- VCP Base — Convergence of price range below resistance → points
- Volume Surge — Abnormal trading volume compared to average → points
The entire algorithm is disclosed on the Methodology page.
Why 'Expected' — No Guarantees
The stocks selected by the scanner are those with observed pre-breakout early signals, not stocks with confirmed surges. Technical signals only utilize statistical advantages from past patterns.
- Perfect signals → There are always cases where stocks decline despite this
- External events (FOMC, earnings, disclosures) can nullify all setups
- Possibility of errors due to data quality (yfinance delays, missing data)
Reason for Disclosing Hit Rate
DawnScan publicly discloses whether a stock achieves +5% or more within 10 trading days after scanning, both successes and failures. Selective disclosure showing only good results misleads investors. Presenting failure cases transparently is the only way to assess the actual reliability of the scanner.
Hit rate trends can be checked on the Hit Rate page.
Situations the Scanner Might Miss
- Sudden Negative News — Disclosures, lawsuits, CEO resignations cannot be predicted by any indicator
- Overall Market Decline — Even if individual signals are strong, all stocks may decline during a market crash
- Low Liquidity Small Caps — Large spreads and actual execution price differences occur
- Fake Breakout — A period where the price breaks resistance and then falls back
View Directly → /scanner
Today's US Expected Surge Stock Scan Results (TOP10) can be checked directly on the pre-breakout early signal scanner. The scoring rationale for each stock and AI explanations in Korean will be provided.