Relative strength

Relative strength compares a stock's return with a benchmark such as the Nifty 500 over the same period. A stock up 20% while the index rose 5% has strong relative strength. It is different from the RSI indicator, which measures a stock only against its own recent moves.

Momentum traders rank stocks or sectors by relative strength over three to twelve months and buy the leaders. Sector relative strength shows where money is moving in the market.