Why The Relative Strength Line Is My Favorite Technical Indicator | Alissa Coram
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- เผยแพร่เมื่อ 15 ก.พ. 2022
- The whole point of active investing and stock picking is to outperform the major indexes, right? Otherwise, you might as well buy an index fund and go drink some mai tais! Well, the relative strength line is a technical indicator that’s all about finding outperformance. I’m spilling all the details on why it’s my favorite indicator to use and sharing a few tips and tricks for using the RS line to its fullest capabilities. What’s your favorite technical indicator and why?
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#relativestrength #RSline #technicalindicators
Now it's your turn! What’s your favorite technical indicator and why?
I like 21 days moving average cause when price cross up may be a biy point
Thanks for clarifying the differentiation between the RS line and number!
Princípialy I use the MACD. It helps me good when I selling options.
Thank you Ally. Really like the information I have learned from your videos. Thank you! I usually use the composite rating as well as the supply and demand stats.
Thank you for watching, Steven! A screen with Composite Rating and RS parameters is a great way to filter a list of quality stocks!👍
Great stuff Ali, always very informative, thanks.
Thanks so much, Miguel!
Price, volume, RS line, and key moving averages. That's all you need to trade breakouts.
From a technical perspective, yes! Ideally there’s some fundamental data there to help with that decision-making process too! :)
@@AlissaCoramIBD good point Ali!
Great video!
Thanks for watching, John!
Very helpful video Ali on how to use the RS Line. As a new MS sub, I am starting to reference that more and more. I like to use the Blue Dot and Tight Areas on the MS250 scans quite a bit. What is displayed on the small stand (tree section?) that goes beautifully with the picture frame, very nice! Oh, my favorite technical indicator - I like to use Ichimoku quite often as S/R areas as well as keeping me on the right side of a trend on multiple time frames...
Thank you for this comment! Glad you are liking those MS features. The thing behind me is an agate slice I picked up at a local store. Thought it was unique!
Ali, These video's are great. I haven't subscribed to MarketSmith yet, but these video's are going to encourage me to. Thank you!!
Hey Joe, thanks! Glad I can provide useful info!
Great video. Please, please consider changing the snapping sounds to something easier on the ears. Thanks and keep the videos coming.
Thank you for the feedback, Paul! We will definitely keep this in mind for the next one!
Hi Ali! V nicely explained. I was still wondering about the time period over which the RS line measures the performance of the stock vs the SP500? Is it that the RS rating measures the performance of the stock vs SP500 over 52 weeks and comes up with a number but the RS line is a real time flow of strength in line format without a number ?
Hey Vishal! The RS line is tracking the difference in performance between a stock and the S&P on a daily basis. So a visual representation of the day-to-day change in that performance difference. The RS Rating is a little different. It’s comparing a stock to all other stocks in our database, not just the S&P 500. The rating gives a little more weight to the most recent 3 months of performance but is looking at 52-week performance for the comparison. Hope that helps! Thanks for your question.
Ali it looks like we have something in common:) I also think the blue dot too. Thanks 👍
Hey Jim! Yes, that blue dot is super helpful. Thanks for weighing in!
Williams%R is a good momentum indicator and gives an earlier warning of a trend reversal
I’ll have to check that out!
Love your videos
Thanks, Sanchez! :)
You can call me fernando
Really great video Ali! Very informative and lots of useful ideas for beginners and more experienced users as well. I've only been a MarketSmith user for about a year but my favorite indicator is also the RS Line because it provides so much useful information in a single, easy to follow metric. It is even more valuable in a tough market like we are in, as you know, because the leading stocks can be easier to identify than when everything seems to be going up in a strong market. BTW, I'm so glad you have started a channel, please keep the videos coming and thanks for everything you do to help other investors be successful! :-) -Rich
Thank you for this comment, Rich! I totally agree with you about the value of the RS line in tough markets. Glad you are liking the channel -- more investing content headed your way soon, including an interview with David Ryan! Cheers.
Thanks
Thanks for this video.
Do you think it's better to check the RS of a stock compared to its sector or compare it to the SP500?
Thanks again. :)
Hey Haseeb! I think they’re both important because in addition to outperforming the S&P, you definitely want to be in the leader of a group. But, if you’re in the best stock in the group but it’s underperforming then S&P, then you’d be in a relative winner but absolute loser, as IBD’s Ed Carson would say.
@@AlissaCoramIBD oooooh, that makes sense thanks a lot! I've been using only sector relative strength so far but I agree with you... Should check against the SP500 also.
Thanks, Ally, I am a subscriber to IBD Digital. U mentioned "monthly chart". Where can I adjust or find annual or monthly charts? All I c r daily, weekly, intraday. Excuse me, if this is out of the scope of the video. Thanks.
Hi there! Thanks for reaching out! It looks like right now our charts on Investors.com only include the timeframes you mentioned, and not monthly. I will let our product team know. I feel like this would be a very useful feature! Monthly charts are available on MarketSmith and Leaderboard. But again, I'll pass along this message. I know we have a lot of things in the works for our site, would be great if this was one of them!
You are gorgeous Ally !
Relative Strength Line (RSL) is good but it has to be supplemented with other indicators, especially moving averages. Case in point: Nvidia hit a new high in both price and RSL on October 17, 2007. Six months later, stock was down 52% vs only 10% for S&P! Also, RSL hitting new highs is not a prerequisite for massive outperformance. On May 3, 2016, stock closed at $9. No new high for RSL or price. Six months later stock was up 100% vs 3% for S&P. A few month laters in July 2016, RSL started to hit new highs. That was confirmation of a big move that was already underway. Stock was up 8-fold to $70 by July 2018. Folks, 5 years later this stock is pushing $430!
nice Ali ;)
Thanks, TD!
I like RS line and scans a lot. But no indicator compares to retail sentiment.. If everyone on twitter is hyped, then sell.. If they are calling for recession and WWIII, look to buy that dip:)
Those psychological market indicators can be very helpful!
rsi can be overbought for months and stock will keep on moving. i like ppo and fast stockafsticwill accumulation and distribution line with rsi
RSi, OBV wiith divergence