In
technical analysis, an arbitrarily set percentage of increase or decline in a
stock's price that the analyst sees as an
indicator to
buy or
sell the stock. For example, the analyst may set his/her own filter rule at 15%. If the stock rises 15%, the analyst recommends buying; if it falls 15%, he/she recommends selling. While the particular percentage is subjective, one arrives at it by observing the stock's historical
trends. The filter rule exists to help the
investor avoid buying or selling at insignificant or anomalous changes in price. However, many analysts do not believe that the filter rule consistently produces
profits for the investor.