I’m a huge fan of Investors.com MarketSmith charting application. Their implementation of a Relative Strength Line (RS Line) is my go-to indicator.
In MarketSmith, the RS Line represents a stock’s performance versus the S&P 500. If you are looking at a weekly chart, the RS Line is the performance of the stock over the past week versus the S&P 500 over that same time frame. The same logic applies to the daily and monthly charts, only the time frames are different.
If a stock moves up for the day/week/month and the S&P 500 does not, the RS Line will move up. If a stock ends the day/week/month flat, yet the S&P 500 moves up, the RS Line will go down.Continue reading