Relative strength is a ratio of a
stock price
A share price is the price of a single share of a number of saleable equity shares of a company.
In layman's terms, the stock price is the highest amount someone is willing to pay for the stock, or the lowest amount that it can be bought for.
B ...
performance to a market average (index) performance. It is used in
technical analysis
In finance, technical analysis is an analysis methodology for analysing and forecasting the direction of prices through the study of past market data, primarily price and volume. As a type of active management, it stands in contradiction to ...
.
It is not to be confused with
relative strength index
The relative strength index (RSI) is a technical indicator used in the analysis of financial markets. It is intended to chart the current and historical strength or weakness of a stock or market based on the closing prices of a recent trading per ...
.
To calculate the relative strength of a particular stock, divide the percentage change over some time period by the percentage change of a particular index over the same time period.
Relative Rotation Graph
Relative Rotation Graphs (RRG) show the relative strength and momentum of
mood swings
A mood swing is an extreme or sudden change of mood. Such changes can play a positive or a disruptive part in promoting problem solving and in producing flexible forward planning. When mood swings are severe, they may be categorized as part ...
in the market compared to benchmarks. The "JdK RS-Ratio" (relative strength, RS) was developed by Julius de Kempenaer, a sellside analyst in The
Netherlands
, Terminology of the Low Countries, informally Holland, is a country in Northwestern Europe, with Caribbean Netherlands, overseas territories in the Caribbean. It is the largest of the four constituent countries of the Kingdom of the Nether ...
.
Relative Rotation Graphs , Stock Charts
References
Technical analysis
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