Relative Strength (RS) Analysis in 5 Mins

In this video Matt goes over the usage of Relative Strength Analysis (RS Analysis) in the world of trading and investing. He does a quick dive into the concept of RS Analysis, 4 ways to measure it and how it can be your secret weapon for making informed decisions in the financial markets.

What You'll Learn:
- The essence of RS Analysis within CAN SLIM
- How to calculate and apply Relative Strength
- William O'Neil's Composite Relative Strength which can be found on Investor's Business Daily
-The RS line, a favorite of technical analysts, compares two securities. Learn to use positive and negative divergences to spot institutional accumulation and distribution.
- CA|RS Caruso Adaptive Relative Strength allows for RS analysis while accounting for each stock's specific volatility, providing a unique and more effective method of RS analysis.
- CD|RS Caruso Divergence Relative Strength uses price divergences between two securities to quickly identify when one security is under accumulation or distribution.
- Real-world examples and case studies

TIMESTAMPS:
00:00 - Introduction
00:21 - What is Relative Strength?
02:52 - 4 Ways to measure RS
03:05 - Composite Relative Strength
04:52 - Relative Strength Line
05:15 - McDonald's Example
07:12 - Caruso Adaptive Relative Strength
08:59 - Price Divergence Relative Strength
09:42 - RACE Example

#RSAnalysis #TradingStrategy #InvestingTips #StockMarketAnalysis #FinancialMarkets #TradingEducation #InvestmentInsights

Related Resources:

[kaseylv]

Thank-you, this was one of the best explanations of relative strength I have heard, especially the different types and usages which was confusing when I first heard of it.

[implantsever]

Wow! AMAZING video Matt. Even when you know something, it's how someone teaches it to you that makes all the difference. I love being a PRO member of your team and the AGI Course is extremely well done. Thank you for your continued support and your great youtube videos as well.

[ashishdoshi]

Nice Video! Matt. Very useful and simple explanation of various RS. Thank you.

[pkpatel]

Excellent content, Matt! Keep it coming.

[jimgrant]

Hey, Matt. Excellent video. I have been a proponent of RS for over 15 years. It's on every chart I look at.

Here's a couple ideas for you.

Add a moving average to your RS lines. I have found a 125-Day EMA works quite well to daily prices.

Add a 3rd line to the charts you showed. It is the ROC%125. That is the Rate of Change % over the last 125 days. That gives great insight into when a security is gain or losing momentum. It is also an excellent criteria to choose amongst multiple trending up securities.

[idrissdiane]

nice explanation. in the third approach, would it make sens to factor out other risk factors such as barra factors (mom, value, sector...) and only look at the pure alpha ?

[LadislavKosar]

Thank you for this video. Perfect as usual 🙂. I appreciate it and always find a pieces of the great trading puzzle.

[ankurperiwal]

Helpful TY! I never really used RS line too much (probably because I didn't know how to use it correctly) - i have always used Price, Volume and MA's only.

[mniBUZZ]

Matt, thanks a lot! What is the lookback period for calculating a stocks’s volatility/beta in CA RS?

[F_A]

Hey Matt, thanks for all the wisdom you share here and on X. As a feedback, It'd be great if you could offer the option of buying each individual indicators as a one time purchase

HEY do you mind sharing which indicator you used to show the relative strength with the blue background?

[jassisidhu]

Can you share the equation to calculate RS?

[jameslowe]

What if IBD closes down one day and no more RS? What would you use as a RS indicator? Perhaps we should use that, instead of relying on a propriety matrix of one company which may close down (esp now that its founder has passed on).

[niravgandhi]

Will these tools work for Indian stock market?