Are TSI absolute values comparable between 2 entities?

MikeMurf

Hi StockCharts
Are TSI indicator values directly comparable between 2 different entities? e.g. Can you say if entity 1 has a TSI of 25 & entity 2 has a TSI of 24 that Entity 1 is in a stronger trend than entity 2?
Thx a lot Mike

markd

Yes and no.

TSI expresses a per cent value resulting from dividing a double smoothed average of signed differences in the close by a double smoothed average of the absolute value of differences in the close.

You can always compare per cent values across different instances.

However, to judge the strength of the trend, you would want to know the direction and slope of the index, not just the single value. For instance, if entity 1 reached 25 by rising from 10 and entity 2 reached 26 by falling from 40, entity 1 might be the better bet. So you might add an additional test for TSI above or below its signal line.

On the other hand, if entity 1 has risen from 10 to 25 in two weeks, while entity 2 has been fluctuating between 23 and 27 for a month and is now 26, again, entity 1 might be the better bet. They might both be above their signal lines, so you would need another test to distinguish them by comparing past values, e.g. they have both moved at least 10 points (or whatever) in the last six weeks (or whatever).