21st May 2022

Relative Strength Scans

Relative Strength Scans

Relative Strength Scans are mostly used to check the Strength or performance of the stocks compared to an index. It tells us whether the stocks are underperforming or outperforming their benchmark. Here we use Nifty as benchmark

Relative strength scans

Firstly you have to choose your benchmark index and measure the relative strength. In this intradayscreener, we took the last 55 trading sessions to calculate relative strength.

In Relative Strength Scans, we can find stocks that are outperforming and underperforming their benchmark(Nifty). Here you have to check the relative strength value. It is always better to select stocks with high relative strength values for taking long position.

How to select the stocks using relative strength in the intraday screener

  • For taking a long position, it is better to select the stocks that outperform the benchmark index and have a high relative strength value.
  • Such stock with good relative strength value are candidate for entry at all pullbacks , especially for swing trading
  • For taking a short position, it is better to select the stocks which are underperforming the benchmark index and have a low relative strength value
  • Such stocks which are having low relative strength value, we can short at all bouncebacks

Examples

Outperforming Benchmark

Let us take an example of  “TRIDENT” stock which outperformed the Benchmark (Nifty).

As you can see, “TRIDENT” shows a positive direction. And its relative strength is also high.

So that we can go long in Trident Stock.

relative outperforming benchmark

Underperforming Benchmark

Let us take an example of “BEL” stock which underperformed the Benchmark (Nifty).

As you can see, “BEL” shows a negative direction. And its relative strength is also low from the last 55 days.

So, we can go for a short in BEL Stock.

relative underperforming benchmark