Relative Strength Trading

[tatrader]

December 23rd update: The Relative Strength of the 11 US Sector ETFs

We can invest directly in the strongest Sectors.

Alternatively, we can choose stocks from the Sectors that show long-term and/or short-term strength.

Research shows that 80% of the profits come from the 20% of the strongest securities.

See below one of the strongest Sector ETFs taken from the above diagram

 

[tatrader]

December 30th update: The strongest stocks in the S&P500

See below one of the strongest stocks taken from the above diagram

 

[tatrader]

See below the daily chart of Amazon
The price moved above the upper Bollinger Band.
Apart from that, the price moves above its 10- 20- and 50-day moving average.

What's more, the Relative Strength of AMZN just turned up and moved above its 20-day moving average

From AMZN’s weekly chart below, we can see:
· The stock is moving along its 10- and 20--week moving average and above its 50-week moving average
· From the Relative Strength chart, we can see that it turned up and touched its 20-week moving average.

 

[tatrader]

January 9th update: The strongest stocks in the S&P100

See below one of the strongest stocks taken from the above diagram

 

[NVP]

Having used relative strength in forex for 20 years i love this thread .......some real value here if people research and expand these ideas ........always go where the money is ....

Has anyone looked at short selling the weakest sectors ?....although forex is much more forgiving and balanced this way than equity markets ......

 

[tatrader]

KOPN - Copin Corp. daily chart

In early January KOPN broke out and started moving along the upper Bollinger Band.

The price is currently moving horizontally, a sign there’s equilibrium between the bulls and the bears.

Finally, the stock is moving above its rising 10- 20- and 50-day moving averages.

The Relative Strength of KOPN is moving up and above its 20-day moving average since mid-December.

KOPN - Copin Corp. weekly chart

From KOPN’s weekly chart below, we can see:

• The stock is moving up and above its 10- 20- and 50-week moving average
• What is more, price moves above the upper Bollinger Band, a sign of bullish strength
• From the Relative Strength chart, we can see that KOPN outperforms our benchmark.

Money Management Guidelines

Suggested Buy: 5.53

Suggested Sell: 4.47

Suggested Trade Size: 940

 

[tatrader]

WFC is showing strength

First of all WFC - Wells Fargo & Co. - belongs to the Financial Sector that is showing strength now.

Let's look at WFC daily chart

Price has just broken above a local resistance.
MACD is moving up and above its signal line
The stock's Relative Strength is also moving up and above its 20-day moving average

Let's look now that the stock's weekly chart:

Price is moving in a bullish channel between its 10-week moving average and the upper Bollinger Band.
Price has also broken above a resistance.
MACD is moving up and above its signal line
The stock's Relative Strength is also moving up and above its 20-day moving average.

I prefer to look at both the daily and the weekly charts to have a better respective of the stock.

 

[tatrader]

Caterpillar has just started an uptrend

In early February WFC broke out and above the blue resistance line and started moving along the upper Bollinger Band.

Finally, the stock is also moving above its rising 10- 20- and 50-day moving averages.

The Relative Strength of WFC is moving up and above its 20-day moving average.

Now, let's move to CAT's weekly chart for a wider view.

From WFC’s weekly chart below, we can see:

The stock is moving up and above its 10- 20- and 50-week moving average

What is more, since November, the price moves between its 10-week moving average and the upper Bollinger Band, a sign of bullish strength

From the Relative Strength chart, we can see that WFC outperforms our benchmark.

Money & Risk Management:

Suggested Buy: 37.8

Suggested Sell: 34.4

Suggested Trade Size: 340

We made the above estimates based on a hypothetical $100000 initial capital and a 1% risk per trade

 

[tatrader]

Monday, April 19th update: Wells Fargo is getting stronger

Here's the daily chart of WFC:

Price started climbing along the upper Bollinger Band, a sign of a strong bullish trend.
At the same time, the stock's Relative Strength moved up and above its 20-day moving average.

Let's look at the stock's weekly chart, a simple Multi Timeframe Analysis:

The stock has been moving in a bullish trend between its 10-week moving average and the upper Bollinger Band since mid-November.

At about the same time the stock's Relative Strength moved above its 20-week moving average.

Finally, the stock belongs to the Financial Sector, one of the best performing sectors in the last few weeks.