Relative Strength (the Market, Sectors, and Individual Stocks)
Stocks do not exist in a vacuum. How is the stock compared to its industry group? How is the group in relation to its sector? How is the sector positioned against the general market for stocks? Are stocks better than bonds or gold?
When seeking to maximize the probability of a trade’s success, the investor often starts with a top-down approach and moves to specific securities or commodities from there. For example, if the decision to invest in equities as an asset class has already been made, the next question is which equities market will lead the way higher. By comparing the relative strengths of each market to a common index, the decision can be quantified.
RS Is Not RSI
Without ...
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