Relative Strength Scans

What is Relative Strength?

Relative Strength (RS) compares a stock's price performance against a benchmark index (Nifty 50) over the same period. It helps identify stocks that are stronger or weaker than the overall market.

• RS > 100: Stock gained more (or lost less) than Nifty — outperforming.
• RS < 100: Stock gained less (or lost more) than Nifty — underperforming.

How to Use RS Scans

Combine the RS signal with EMA trend and RSI to find stocks that are both technically strong and outperforming the index — these are the best candidates for momentum trades.

Why Use Price Relative Indicators?

The price relative indicator (also known as the relative strength comparative) uses a ratio chart to compare the performance of one stock to another or to the benchmark index. It is used for:

• Identifying stocks that hold up well during broad market declines, or reveal weakness during market upswings.
• Measuring a stock's performance against the benchmark index (Nifty 50).
• Assessing whether a stock is outperforming or underperforming its sector or industry group.

How to Calculate Relative Strength

The formula for Relative Strength is straightforward:

RS = Stock's Price Change % / Index's Price Change %

An RS value above 100 means the stock has outperformed the Nifty. An RS value below 100 means it has underperformed. This screener uses the last 55 trading sessions to calculate the RS value.

How to Choose Stocks with the RS Screener

• For long positions: Select stocks that are outperforming the benchmark index and have a high RS value. High RS stocks are good for swing trading and can be entered on pullbacks.
• For short positions: Select stocks that are underperforming the benchmark index and have a low RS value. These can be shorted on bouncebacks.
• Combine RS signals with EMA trend and RSI for higher-conviction trades.

Related Tools

• RSI Scans
• Stock Trend Scanner
• Relative Outperformance Screener
• Price Movers