Relative strength to the Market (SP500) Sign

Stocknut

Stan Weinstein"s book, "Secrets for Profiting in Bull and Bear Markets", talks about the Rrelative Strength Zero Line and waiting until the relative strength of a stock is moving into positive territory before buying. StockCharts price relative is a ratio with no sign. I think a zero line would be a big help in determining the strength of price movements. The direction of the price relative
Is there a way to plot a zero line in StockCharts' price relative indicator? Or is there another way to get at this idea?

markd

If you use the Price-Performance indicator and enter a ratio symbol as its parameter, you get a positive and negative per cent scale with a zero line on the chart.

You might not have to wait for a zero line crossing. RS crossing above a longer MA (13 or 52 weeks, or 63 or 250 days) that has lost down side momentum (flattened out) can also be a good indicator of future gains, even if its below zero. Weinstein's book was written before the dawn of personal computers, and the Mansfield charts did not show an MA for RS, so wouldn't have had an opinion on it.

You might want to explore other other benchmarks for RS. There are indexes or ETFs for the different markets, sectors and industries. You can search the symbol catalog for ideas.

For NASD indexes, search on "index-nasdaq" (without the quotes)

For SP market, sector and industry indexes, search on "$SP"

Also for industries indexes, search on "$DJUS".

For sectors, you could also use the sector ETFs, XLE, XLB, XLI, etc. (search on XL or SPDR).


You can simplify adding ratio symbols to your chart using pseudo symbols, $SYMBOL, $SECTOR, $INDUSTRY.

So for instance

$SYMBOL:$SECTOR will compare any symbol to its sector, provided the symbol has been updated with that information in the database.

$SYMBOL:$INDUSTRY will do the same for symbol and industry.

Not all symbols, like ETFs, have a sector or industry assigned. Also some stocks don't have them, although I'm not sure of the criteria for inclusion/exclusion. Sector and industry assignments are maintained by Stockcharts and sometimes disagree with other stock sites. It's more likely to happen if the company has several lines of business - does a company that both explores for gas and has gas pipelines belong in Exploration or in Pipelines? Analysts differ.

Stocknut

never mind the new updated release will take care of it. thanks