Relative Strength - StockEdge Blog

10/24/21, 9:17 PM Relative Strength - StockEdge Blog
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Relative Strength (RS)

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June 20, 2020
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Table of Contents 
Relative strength is a technique used in momentum investing and identifying value stocks.It

consists of investing in securities that have performed well, relative to their market or
https://blog.stockedge.com/relative-strength-rs/?utm_source=linkedin&utm_medium=social&utm_campaign=se-blog-post 1/14
benchmark. Relative strength is a type of momentum investing used by technical analysts and

value investors.
 
Relative strength helps to predict that the trends currently displayed by the market will continue
for long enough that they can realize a positive return.
What Is Relative Strength(RS)?

Relative strength is a measure of the price trend of a stock compared to its benchmark index or
sectoral index.
Relative strength Scans show the companies which have outperformed/underperformed

Benchmark Index like Nifty or Sensex and Sector Index like Realty, Banking, Auto etc in a period of
55 trading days. A stock’s relative strength trend adds an additional dimension of relative price
behaviour to the investment decision.
Relative strength is one of the most useful indicators in the market, highlighting when stocks are
outperforming or underperforming a benchmark index or sector over a period of 55 trading
days.
Relative Strength is calculated by dividing the percentage price change of a stock over a period
of 55 trading day by the percentage change of a market index or sector over the same period.
It can also be used to compare two companies in the same industry or Index. This comparison
examines the relative strength performance of two stocks over their benchmark or sector and
can help you decide whether you should hold one versus the other.
Using Relative Strength in StockEdge App:

Above we have discussed the Relative Strength, now let us discuss how we can use this technical
indicator to filter out stocks for trading:
In StockEdge there are many Relative Strength scans available for filtering out stocks for
trading:


 
Let us discuss in details about some of these scans:
Strongly Outperforming Benchmark Index :

It is a bullish indicator which shows a list of stocks that are strongly outperforming the
Benchmark index i.e increase in stock price is more than the increase in the price of the
Benchmark Index. Stocks with Relative strength more than 0.3 are shown here.
Following is a list of stocks which has fulfilled this criterion on 11th November 2020:


 
Similarly, in the scan – ‘Strongly Underperforming Benchmark Index’ , the user get a list of stocks
that are strongly underperforming the Benchmark index i.e increase in stock price is less than
the increase in the price of the Benchmark Index.
See also: Average True Range (ATR)
Increasing Relative Strength- Benchmark index:

Stocks whose Relative Strength is increasing for the last three days. This scan will contain a list of
stocks whose RS (Benchmark Index) is above 0 and increasing for the last three days
(RS1>RS2>RS3>0)


 
Similarly in the scan – Decreasing Relative Strength – Benchmark index, the user will get a list of
stocks whose Relative Strength is decreasing for the last three days where current day’s RS being
below zero and decreasing for the last three days(RS1<RS2<RS3).
See also: Learn about the Relative Strength Index (RSI)
Strongly Under-Performing Sectoral Index:

Stocks which are strongly underperforming the Sectoral index i.e stock price has not increased
compared to price of Sectoral Index. Stocks with Relative strength less than -0.3 are shown here
Following is a list of stocks which has fulfilled this criterion on 11th November,2020:

 
Decreasing Relative Strength- Sectoral Index:

Stocks whose Relative Strength is decreasing for the last three days. This scan will contain a list
of stocks whose RS (Sectoral Index) is below 0 and decreasing for the last three days
(RS1<RS2<RS3<0)


 
Above are examples of Relative Strength scans that tell you if the stock is bearish or bullish and
also give us a list of the stock which fulfills the criteria of the particular day.
Frequently Asked Questions
How do you calculate relative strength?

It is calculated by dividing the percentage price change of a stock over a period of 55 trading day
by the percentage change of a market index or sector over the same period.
What is a good relative strength number?

 or
A Relative Strength > 0.3 indicates that the stock has strongly outperformed the benchmark
sector index, whereas Relative Strength < -0.3 indicates that the stock has strongly
underperformed the benchmark or sector index, and Relative Strength = 0 indicates that the
stock performed on par with the market.
 
What is the relative strength of a stock?
It is a measure of the price trend of a stock compared to its benchmark index or sectoral index.
What is relative strength vs rsi?

The relative strength is a measure of the price trend of a stock compared to its benchmark index
or sectoral index whereas Relative Strength Index (RSI) is a momentum oscillator. This indicator
oscillates between 0 and 100. RSI is considered to be overbought when it is above 70 and
oversold when it below 30.
You can filter out the stocks and can trade accordingly using these scans.
Join StockEdge Club to get more such Stock Insights. Click to know

more!
You can check out the desktop version of StockEdge.
Tags: Relative Strength technical analysis Technical indicators Technical scans
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Comments 15
BP GAUTAM
 1 year ago
i am day trader plz suggest plan suitable for me. I also invest for long term. I also want
to analysis relative strength.
 Reply 

Ganga
 1 year ago
 
Please check our premium plans at https://stockedge.com/Plans/compare
 Reply
Warun
 1 year ago
Excellent description. This is very helpful
 Reply
Surbhi Lohia
 1 year ago
Thankyou for your feedback. you can premium plans at

https://stockedge.com/Plans/compare
 Reply
Sandeep Reddy
 1 year ago
Can you do momentum stock ranking.
 Reply
Ganga
 1 year ago
We will try our best to write content on this also soon
 Reply
g srinivasu
 1 year ago
i want elaborate explanation on RELATIVE STRENGTH in selection of stocks.
please see that the list of stocks in any screener will be imported to excel sheet for our
further processing.
 Reply
Ganga
 1 year ago
Sure we will update on this soon
 Reply
Hiren Shah
 1 year ago

Good article very useful for learning.

 Reply
 
Ron
 12 months ago
Hi,
(1) Can you use this app for both AU & US stocks ?
(2) Can you do Relative strength scans to Index, Sector or Industry on the free plan or
which plan do you have to use for these scans
(3) What data can get on the free plan,
(4) What is the limit on requests for the free plan
 Reply
Ganga
 12 months ago
Please provide your mail id our team will contact you soon!
 Reply
Bhaskar
 11 months ago
I am a swing trader and had been using Stock Edge and RS screener for some time and
it’s showing very good results.
It would be good if we also have Sectoral RS, I mean, for the sectors mentioned in Stock
Edge Eg. Abrasive, Tyre, etc, comparison to Nifty 50. I am sure that would give us further
Edge in Stock selection.
Stock Edge is doing fantastic Job. Keep it up.
 Reply
Ganga
 11 months ago
Our team will work on this and thanks for using Stockedge
 Reply
Saikat Nandy
 5 months ago
Hi
Nicely explained.
One q
Why 55?

What period suitable for teaching more aggressive momentums, say one month
period?
 
RegardsANALYSIS 
FUNDAMENTAL STOCKEDGE TUTORIALS  MUTUAL FUND 
 Reply
Abdur Rahim
 3 months ago
Very good presentation
 Reply
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10/24/21, 9:17 PM Relative Strength - StockEdge Blog

FUNDAMENTAL ANALYSIS  STOCKEDGE TUTORIALS  MUTUAL FUND 

Relative Strength (RS)

24.1k  Share on Facebook  Share on Twitter  Share On WhatsApp 

Relative strength is a technique used in momentum investing and identifying value stocks.It

benchmark. Relative strength is a type of momentum investing used by technical analysts and

What Is Relative Strength(RS)?

Relative strength Scans show the companies which have outperformed/underperformed

Using Relative Strength in StockEdge App:

TRENDING STOCKS INSIGHTS  TECHNICAL ANALYSIS 

Let us discuss in details about some of these scans:

Strongly Outperforming Benchmark Index :

TRENDING STOCKS INSIGHTS  TECHNICAL ANALYSIS 

See also: Average True Range (ATR)

Increasing Relative Strength- Benchmark index:

TRENDING STOCKS INSIGHTS  TECHNICAL ANALYSIS 

See also: Learn about the Relative Strength Index (RSI)

Strongly Under-Performing Sectoral Index:

TRENDING STOCKS INSIGHTS  TECHNICAL ANALYSIS 

Decreasing Relative Strength- Sectoral Index:

TRENDING STOCKS INSIGHTS  TECHNICAL ANALYSIS 

Frequently Asked Questions

How do you calculate relative strength?

What is a good relative strength number?

What is relative strength vs rsi?

Join StockEdge Club to get more such Stock Insights. Click to know

You can check out the desktop version of StockEdge.

Tags: Relative Strength technical analysis Technical indicators Technical scans

 Share  Tweet  Send 

Previous Post Next Post

StockEdge version 5.0 Understanding Business Houses

STOCKEDGE TUTORIALS STOCKEDGE TUTORIALS

Understanding ‘Investment Ideas’ of StockEdge Version Update 7.1

 OCTOBER 21, 2021  3.8K

StockEdge Version 7.0

TRENDING STOCKS INSIGHTS  TECHNICAL ANALYSIS 

Excellent description. This is very helpful

Thankyou for your feedback. you can premium plans at

Can you do momentum stock ranking.

We will try our best to write content on this also soon

i want elaborate explanation on RELATIVE STRENGTH in selection of stocks.

Sure we will update on this soon

Good article very useful for learning.

(3) What data can get on the free plan,

(4) What is the limit on requests for the free plan

Stock Edge is doing fantastic Job. Keep it up.

Very good presentation

TRENDING STOCKS INSIGHTS  TECHNICAL ANALYSIS 

Club Support : +916289906895

Manappuram Finance Ltd. – Is the golden boy losing its glitter?

What’s Trending: Federal Bank, Subros, and 3 other stocks

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