The RS Rating evaluates a stock's price performance relative to the market over 52 weeks, helping traders identify stocks that are outperforming and potentially poised for further gains.
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The RS Rating calculates a score by analyzing a stock's performance across different time periods: 3, 6, 9, and 12 months. It uses a weighted formula where recent performance has more impact on the final rating. The score ranges from 1 to 99, with 99 representing a stock that outperforms 99% of all stocks in terms of relative share price performance.
The calculation involves multiplying each performance period by a specific weight: 40% for 3 months, 20% for 6 months, 20% for 9 months, and 20% for 12 months. This comprehensive approach provides a nuanced view of a stock's momentum and relative strength in the market.
Why it may be useful
The RS Rating is crucial for traders seeking to identify high-performing stocks with strong momentum. By comparing a stock's performance against the broader market, it offers a quick and objective measure of relative strength. This metric helps investors quickly screen for potentially promising investment opportunities without complex analysis.
The rating provides valuable insights into a stock's performance trajectory, allowing traders to focus on securities that are demonstrating consistent growth and outperforming market benchmarks. It serves as a powerful screening tool for those looking to capitalize on stocks with positive momentum and potential future gains.
When to explore it
The RS Rating is most effective for trend followers and breakout traders looking to identify stocks with strong upward momentum. It works best when used in conjunction with other technical and fundamental analysis tools to confirm potential investment opportunities. Traders should pay special attention to stocks with ratings above 80, which indicate significant outperformance.
The indicator is particularly useful during bull markets or when seeking stocks with consistent growth potential. However, traders should be cautious and not rely solely on the RS Rating, as past performance does not guarantee future results. It should be used as part of a comprehensive trading strategy that includes risk management and additional technical indicators.
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What we’ve verified
Access, alerts and repainting behaviour have not been independently verified for this indicator. Check the creator’s current publication and settings.
General descriptions and classifications are recovered research. Verified details above identify the specific checks we have completed. Check the creator’s current publication for later changes.
