Noob question re RS

KGTrader4 said:
What’s the diff between Relative strength and relative Strength Index, and which is the better indicator to use to assess the strongest sectors?
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Indicators are run by price data. Let that sink in. Readings could be overbought and oversold a long time and the price is still heading in the opposite direction. Instead, learn to read candlestick charts, pay attention to trends, support and resistance levels. That will give you a more objective idea of where that stock you are trying to analyze is headed as far as trend goes. Price is the purest data. Think about it, shares have actually, been bought and sold at certain price levels. Focus on that.
 
Relative Strength is a concept... of one issue outperforming another(s).

Relative Strength Index is an oscillator about "where an issue is now vs its most recent range" (number of bars, variable).

They sound similar but indicate much differently.

As for strongest sectors... you need a "scan and ranking" tool... which will show how issues compare to each other.
 
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I get that price by itself is important. But it also Seems to me there is value in knowing which sectors of the s&P 500 are outperforming the others, particularly if you are looking to focus your trading on the Sector spyders.
 
KGTrader4 said:
I get that price by itself is important. But it also Seems to me there is value in knowing which sectors of the s&P 500 are outperforming the others, particularly if you are looking to focus your trading on the Sector spyders.
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Sector and stocks as well. "Sector rotation"... where you try to have your money either (1) in the stocks which are oversold the most where you expect/hope for the biggest rebound, or (2) highest Relative Strength... that is, "leading the pack".

An example for today... What's "leading the pack"? Energy. What's most oversold? I don't know which is "most", but semiconductors are way off their bounce high. If you wanted to play for an oversold pop, semiconductors would be a sensible choice.
 
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KGTrader4 said:
I get that price by itself is important. But it also Seems to me there is value in knowing which sectors of the s&P 500 are outperforming the others, particularly if you are looking to focus your trading on the Sector spyders.
More...

You can use the Finviz.com screener to focus on the strongest sectors where the strongest stocks are likely to come out from.
 
smallfil said:
Indicators are run by price data. Let that sink in. Readings could be overbought and oversold a long time and the price is still heading in the opposite direction. Instead, learn to read candlestick charts, pay attention to trends, support and resistance levels. That will give you a more objective idea of where that stock you are trying to analyze is headed as far as trend goes. Price is the purest data. Think about it, shares have actually, been bought and sold at certain price levels. Focus on that.
More...
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Exactly;
trends can + do say oversold + overbought for months..................................................................................................
ON IBD website [investors.com ] rs is measure against SPY\s&p500.
So its a flat line mostly on spy/LOL; spy compared to S&P 500
 
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