Stock Research: Relative Strength of a stock
Relative strength is one of the factors I'll always look at when searching for a good stock. What is Relative Strength?
Expressed in percentage, it shows what portion of the market/industry/sector a particular stock has outperformed. Hence, by looking at this figure, we're able to know the strength of the stock we hold relative to other stocks.
For example, stock A has a relative strength of 90%. Therefore, it has outperformed 90% of the stocks in the market/industry/sector for a specific period.
Also, it is desirable that the relative strength is of a high number(more than 50%). A high relative strength shows that the stock has a high performance and if it can sustain this high number over a longer period of time, then this can be interpreted as the company is growing.
