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Strategies & Market Trends : Point and Figure Charting

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To: P. Ramamoorthy who wrote (749)	2/17/1998 12:36:00 PM
From: Ben Antanaitis	Read Replies (1) of 34813

Ram, The term Relative strength is, well... it's relative. ???? Well, what I mean is that you can construct a comparison called relative strength and it can mean a comparison of one stock to the DOW or the S&P500 or the MidCapIndex, or to a collection of similar stocks (aka a sector), or to stocks all based in Indiana, or to whatever collection of values you find meaningful to your analysis. The formula for easy use will be the same ((Stock price)/(value of the collection))*(decimal adjustment factor) where the decimal adjustment factor is just that.. If you find that the quotient you are getting is small (< 20), then multiply the quotient by 10, or 100, or 1000, or 10000 until the quotient's are 'workable' (read that chartable in ranges above 20). The RS referred to by most people is the RS based on the DJIA. The RS referred to when talking sector analysis usually mean a RS based on the sector. But be alert for clues in the context or a specific notation of the 'base'. Hope this helps. Jan can double check... Ben A.

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