Saturday, September 11, 2010

3, 6, 12 month RS are different measures

According to MSN the 14 day RS values are different and cannot compare them with each other. For example , the 14 day RS low for IDT for a 1 year graph is 60 and for the last 3 months graph it is 45.

So when comparing the RS between two stocks one has to make sure that they belong to the same time range. This is important to interpret the weakness or strongness of the trend. And how low to hold on to till
the stock actually breaks the 30 day MA.

I observe that RS was around 80 when it broke off the 30 d MA on IDT, that is pretty high. From this I understand that one cannot make a definite statement about the RS, rather than declining or ascending RS for buy or sell decisions.

I feel intuitively that the 14 day RS is good for 3 and 6 month graph, because of the 2 week relative analysis.

In case of JKS, a 3 month RS shows a low of 55 and has not cut the 30 d MA.
Interesting observation.

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