relative strength


Relative strength

Movement of a stock price over the past year as compared to a market index (like the S&P 500). A value below 1.0 means the stock shows relative weakness in price movement (underperformed the market); a value above 1.0 means the stock shows relative strength over the one-year period. Equation for Relative Strength: [current stock price/year-ago stock price] divided by [current S&P 500/year-ago S&P 500]. Note: this can be a misleading indicator of performance because it does not take risk into account.

Price Momentum

The performance of a stock relative to its industry or the performance of an industry relative to the market as a whole. A stock (or industry) that outperforms its industry (or market) for a given period of time is seen as a bullish sign for that stock (or industry). The concept is also called relative strength.

relative strength

The price strength of an individual stock compared with the strength of an industry index or a general market index. In general, a stock that acts stronger than its industry or the market as a whole shows a bullish sign for that stock. Likewise, an industry index that acts stronger than a market index is bullish for stock in that industry. Relative strength is typically used when calculating an index of a stock's price to its industry or market index over a period of time. Also called strength.