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Strategies & Market Trends : Point and Figure Charting
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To: Ditchdigger who wrote (13940)2/12/1999 4:49:00 PM
From: Ms. X  Read Replies (2) of 34811
 
Sure,
Let's say the market moves up 10% and the stock moves up only 8% - it under performs the market. 8% is good but not as good as the market. So while it is moving up on the chart, comparatively it isn't moving at the same rate as the market.
The RS did improve but no where near enough to reverse.

Also, if a stock stays stagnant while the market moves up, the RS will weaken.

Now in the case where the RS shows the stock has under performed the market and the market starts to slow, you can assume the stock will too.

This brings up a good point. If a stocks RS is in X's indicating that it is out performing the market the stock can still go down. In the example of a market that declines 10% and the stock only declines 8% - it has out performed the market but it still has moved down. That is why it is very important to always have the big picture first, then evaluate the stock.

Does that make sense?
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