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Relative Strength Ranking

SURI-Enterprise
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suriNotes .com

on 4 February 2018

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Transcript of Relative Strength Ranking

Chart Summit
How to Compute RS?
1. Universe (200 stocks/etfs/indexes)
2. Use Performance Metrics
3. Compute 1D, 5D, 1M, 3M, 6M, Yr, YTD%
4. Compute RS Ranks in Each Category
5. Compute Historic RS Rank of Each Instrument

RS Charts
H&S
Relative Strength Ranking & Scanning
February 13, 2017
NWTTA Meetup

Tops/Bottoms
Marktet Context
ABCs
Patterns
X5
Context

Execution
Execution/Mgt
Key Supp/Res.

MAs (21, 89, 200)
Fib. Bands
Pivots
Fib. Retracenents
Fib. Extensions
Perfect ABCs
Balanced ABCs
Multiple ABCs
ABC within ABCs
Embedded ABCs
Reversak Zones
Gartley
Butterfly
Crab
Bat
Sharks
Perfect Gartleys
Price/Time Projections
Perfect H&S
Inv. H&S
Embedded H&S
Trend Tools
Double Top/Bottoms
Dragons
2B
Triangles
Triangles (Asc./Desc./Symm)
Flags/Wedges/Pennnants
Wolf Waves
Broadening
Elliott Wave Patterns
CMI
SuperTrend
VLTY

Difference between RSI and RS
Conference Seminar Listings
IBD 50 Rankings

IBD Charts

StockCharts: Scooters, IBD 50: RS Rankings

Performance Metrics

RSI is Comparing to itself
RS is Comparing to an External RS Value

RS Rank Computation
RS Factors Ranking & Factors

Relative Strength vs. Relative Weakness

Show Charts of % Chg per Day

Charts, in 2016/2017

How I run Scanner to help me...

Momentum + Relative Strength Setups
RSI vs. RS
RSI (Relative Strength Index)
Wells Wilder (1978)
Momentum Indicator

14 days...
Upper Close Differences (U1.. Ux)
Down Close Differences (D1...Dx)

SR = Sum Up/Sum Dn
RSI = 100 - SR/(1+SR)

RS (Relative Strength)
Comparitive Relative Strength)
RSI: RSI compares the price strength to itself in the last X days

RS: Compares the price sterngth to external Index strength or a Group of Stocks Strength
RS Methods

* 3M xing 1Yr in oversold, overbought
* Crossing 75 Upside
* Crossing 25 Downside

*No shorts when both are in Overbought

*No Longs until they are at least above 50

Stocks showing high Relative Strength are likely to continue increasing in Price.. It is better to buy those stocks than stocks which are falling. -- Livermore

Relative Strength in its simplistic terms, measure STOCK's Momentum in some defined metric and compare its Value to the Market.

Robert Levy found 26 weeks is the best.

Example: IBM (6-month) ROC: 12%, SPX (6-month ROC: 10%, RS: 1.2 .. Similar to Beta computation
Strength Tools
"the best performers from the recent past have the highest probability of continuing their performance for near future."
Relative Strength Ranks
Performance Metrics
RS Rank does NOT guarantee a WIN
Ranked 99 to 1
Strong Stocks have Consistent RS Rising in multiple RS

Pick the Strong Stocks Crossing 70
Pick the Weak Stocks Crossing 20
20-70: Will Chop. Watch 50 Cross overs also

Look for Sudden JUMP in the Relative Strength Ranks (of 3M, 1 Yr)

Never trade Stocks which have RS (3m) & RS (1Yr) < 20

Rate of Change
1D, 5D, 1M, 3M, 6M, 1Yr, YTD
Volatility StdDeviation
Distance from 200 SMA
RSI, Stoch. Values
Earnings Growth
PE Growth




IBD
StockCharts (SCTR Rank)
MarketInOut.com
Relative Strength Rank Resources
Trading Rules
1. Trade the BEST of the BEST Stocks
2. Trade in the Direction of the Trend
3. Cut your Losses, Let your Winners RUN
How to Use RS?
RS Trades
How to Compute RS?
1. Universe (200 stocks/etfs/indexes)
2. Use Performance Metrics
3. Compute 1D, 5D, 1M, 3M, 6M, Yr, YTD%
4. Compute RS Ranks in Each Category
5. Compute Historic RS Rank of Each Instrument

Relative Strength Ranks
Performance Metrics
Rate of Change
1D, 5D, 1M, 3M, 6M, 1Yr, YTD
Volatility StdDeviation
Distance from 200 SMA
RSI, Stoch. Values
Earnings Growth
Sales Growth

Internal RS
External RS
Compare Stock Performance with a benchmark S&P 500 Index Performance or Compare to its own SECTOR index etc.

RS = Stock Performance/Index Performance

May not be all that useful.

John Murphy
How to Use RS Ranks?
RS Matrix
(ONE Day)
RS (Historic)

Best Trade Selection
MOMENTUM + Relative Strength
BUY Pattern Breakouts Supported by
Relative Sterength Rank Movements
RS Accelaration, Crossings, Levels
Full transcript