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Relative Strength is one of the most important elements of equity
investment.
Go to <equis.com> and scroll to the very bottom of the small window on
the extreme left.
Click the green tab labeled 'Formulas'. Look for 'Comparative Relative
Strength' and you will find all the data you need to construct relative
strength charts for single stocks and composites plus how to perform an
Exploration on them.
There is a second method of constructing relative strength which I have
developed using a comparative tabular format. This is based on the
brilliant work of James Dines in his 600 page treatise on technical
analysis in 1972. He formatted a momentum table for all sectors and
watched the relative movement of the sectors up and down the table in
relation to their momentum value.
It sounds complicated but isn't. Try it. Calculate the momentum for
several sectors, stocks, metal prices or whatever. Sort them in value
highest to lowest and watch their week by week relative movement up and
down the table.
I have adapted this to trading futures on a daily basis by a table of
the various futures markets from Palladium thro DJ indexes to world
markets. This shows me where I should be operating. It signals a switch
from equities into currencies or precioues metals or into base metals or
bonds or softs. Ensure that you always use a constant $ database or the
currency factors will distort the results.
Relative strength is certainly one of the most important elements of
techanalysis.
Regards to all.
Dr. Clive Roffey
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