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Volume & momentum scan

Relative Strength Screener

This scan finds stocks with an RS rating above 90, which means they beat at least 90% of the stocks in their market over about 6 months, while still above their 50-day moving average.

Run this scan in the live demoFree, no sign-up. The demo uses made-up sample data.

The exact rule

Type this in Chalni: rs rating above 90 and close above 50 day sma

  1. RS rating(126) > 90
  2. Close > SMA(50)

Find US stocks where the RS rating (126 days, 1–99) is above 90; and the closing price is above the 50-day simple moving average.

Formula view
rs_rating(126) > 90
AND close > sma(close, 50)
Example chart: Relative strength leadersDaily candles of a made-up sample stock with 50-day SMA; Lower panel: RS rating (1 to 99), dotted line at 90. The shaded day is the day the scan fired.
  • 50-day SMA
  • Lower panel: RS rating (1 to 99), dotted line at 90
  • Shaded day: the scan fired
Example from Chalni's made-up sample market, not a real stock. It shows the most recent time this scan fired in the sample US market, picked whether or not the trade worked.

What it means

Relative strength compares a stock with other stocks, not with its own past. Momentum research going back decades has found that recent winners have tended to keep winning for a while, which is why many growth traders shop only among the top performers.

Chalni's RS rating ranks each stock's 126-day return against every stock in the same market and gives a score from 1 to 99. The 50-day rule removes leaders that have started to break down.

How traders use it

  • Use it as your starting list, then look for good entries such as pullbacks or bases.
  • Many growth investors look for RS above 80 or 90 together with strong earnings growth.
  • Compare leaders across sectors to see where money is flowing.

Watch out for

  • Leaders can fall hard when the market turns. Momentum crashes are real.
  • A high rating says the past 6 months were strong, not that the next 6 will be.

Test it before you trust it

Every scan in Chalni sits an exam. First it runs on older data, the practice: each time it picks a stock, the stock is held for 10 trading days and 0.2% is paid in costs. Then it runs on newer data it has never seen, the exam. A scan that only works in practice has just memorised the past.

See the practice and exam results for this scan in the demo (on sample data; real data comes at launch).

Questions

What is a relative strength rating?

A score that ranks a stock's price performance against other stocks. A rating of 90 means it did better than 90% of them over the period.

Is relative strength the same as RSI?

No. RSI compares a stock's own recent gains and losses. Relative strength compares the stock with other stocks.

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