What Is Relative Strength (RS Rating)?

Relative strength is a momentum measure that shows whether a stock is outperforming the market or its own recent trend over a defined period. Higher readings signal price leadership; lower readings signal lagging or weakening momentum.

The term "relative strength" is easy to confuse because investors use it in more than one way. Some platforms show an RS Rating as a percentile score versus the broader market. Others show a relative strength line against an index such as the S&P 500. ScreenerHub exposes Relative Strength (Levy), which compares the current stock price with its own 26-week moving average. The core idea is the same in all cases: is this stock acting stronger than the baseline you compare it against?

TL;DR: Relative strength is a momentum shortcut. It tells you whether a stock is leading or lagging. An RS Rating of 90 usually means a stock outperformed 90% of the market over the chosen period; a Relative Strength (Levy) reading of 1.10 means the stock trades 10% above its 26-week average. In ScreenerHub, you can use the rs_levy filter to find trend leaders quickly.

Why Relative Strength Matters for Stock Screening

Most investors first look at valuation, revenue growth, margins, or debt. Those are important, but they do not tell you whether institutions are actually rewarding the stock right now. Relative strength adds that missing market-behavior layer.

Imagine two businesses with similar fundamentals. Both have solid revenue growth, healthy margins, and manageable debt. One stock has spent the last six months consistently making higher highs. The other has gone nowhere. Relative strength helps you separate the true market leader from the merely acceptable company.

That is why relative strength shows up in many momentum strategies. It helps you avoid stocks that look fine on paper but are still being ignored by the market. It also gives you a more disciplined way to search for trend leaders than simply scanning charts one by one.

What relative strength adds to a screener

How Relative Strength Is Calculated

Relative strength is not one universal formula. It is a family of momentum measures built around the same question: compared with what baseline is this stock strong?

The three most common definitions

The first two are common in momentum investing literature. The third is the live ScreenerHub field. It does not rank a stock against every other stock in the market; instead, it measures how far the stock is trading above or below its own medium-term trend.

A concrete example

Suppose a stock trades at $84 and its 26-week moving average is $70.

That reading means the stock is trading 20% above its 26-week average. That is usually a sign of strong upward momentum. By contrast, a reading of 0.92 would mean the stock trades 8% below its 26-week average, which points to a weaker trend.

If you use a percentile-style RS Rating elsewhere, the interpretation is similar: higher means stronger. The scale is just different.

How to Interpret Relative Strength

The important question is not whether a number is "high" in isolation, but what it says about trend quality and whether the stock is becoming extended.

Relative Strength (Levy) benchmarks

⚠️ Context matters: A high relative strength reading is not automatically a buy signal. In euphoric markets, the strongest stocks can become overcrowded and reverse sharply. In defensive sectors, a smaller reading may still be impressive because those stocks usually trend more slowly.

Relative strength vs. RSI

This is the confusion that trips up many investors.

• Relative strength asks whether a stock is strong compared with a benchmark or its own trend.
• RSI asks whether recent buying pressure has become overbought or oversold on a 0-100 oscillator.

A stock can have strong relative strength and still have a moderate RSI. That is often the best setup for momentum investors: leadership without extreme overheating. Pairing relative strength with a moving average filter and RSI is usually more useful than relying on any one technical metric alone.

Relative Strength in a Stock Screener

Relative strength is most useful when it acts as a gatekeeper. Instead of asking, "Which stocks went up yesterday?" you ask, "Which stocks are persistently stronger than the baseline I care about?"

In ScreenerHub, the live field is Relative Strength (Levy) with key rs_levy. A value above 1.00 means price is above the 26-week average. A value above 1.05 usually indicates a stock with enough trend strength to deserve a closer look.

Screener 1: Momentum leaders with confirmation

Find stocks with clear trend leadership, but avoid names that are already in blowoff-top territory.

This screen looks for medium-term leaders that still have trend confirmation from other technical filters. It is a strong companion setup for the momentum guide at Find Momentum Stocks.

-> Try this screen in ScreenerHub: Relative Strength (Levy) > 1.05 ->

Screener 2: Pullback inside an uptrend

Find stocks that are still above trend, but not extremely extended.

This setup helps you find stocks that still look healthy without forcing you to chase the most overextended names.

Common Mistakes When Using Relative Strength

1. Confusing relative strength with RSI They are not interchangeable. Relative strength measures price leadership. RSI measures recent buying versus selling pressure. If you use the wrong metric, you will screen for the wrong behavior.

2. Comparing unlike definitions An RS Rating of 90 and a Levy reading of 1.10 both signal strength, but they are not the same scale. Always confirm what definition and lookback period a platform uses before comparing numbers across tools.

3. Chasing the highest reading without a process The strongest stocks are often the most tempting - and the most crowded. A very high relative strength reading can mean a stock is already extended. Combine relative strength with 52-week high/low context, moving averages, and basic risk rules before acting.

Frequently Asked Questions

What is a good relative strength rating for a stock?

If you are using a percentile-style RS Rating, many momentum investors focus on stocks above 80 or 90 because those names are outperforming most of the market. In ScreenerHub's Levy-style version, many useful screens start around 1.05, which means the stock is trading about 5% above its 26-week average. The right threshold depends on how selective you want the screen to be.

Is relative strength the same as RSI?

No. Relative strength measures whether a stock is acting stronger than a benchmark or its own trend. RSI measures the balance of recent gains and losses on a 0-100 scale. Relative strength is about leadership; RSI is about momentum pressure and potential overbought or oversold conditions.

What does a Relative Strength (Levy) reading of 1.10 mean?

It means the stock is trading 10% above its 26-week moving average. That usually points to a healthy upward trend, but it does not guarantee the trend will continue. You still need to check broader market conditions, liquidity, and whether the stock is becoming overextended.

Which relative strength filter does ScreenerHub use?

ScreenerHub uses Relative Strength (Levy), keyed as rs_levy. It compares the current stock price with its own 26-week moving average. That makes it a practical trend-strength filter for momentum screens, especially when combined with RSI, moving averages, and price-performance filters.