When I started in the investing business some two decades ago, one of
the first things I learned about how to properly select stock winners
was to look at the price action. More specifically, I was taught
directly by Investor's Business Daily founder William O'Neil that what matters most is the price action of a stock relative to the rest of the market.
I soon found out that measuring a stock's relative price strength, or
simply relative strength (RS), was a key filter used to identify the
stocks the smart money was banking on for market-beating returns. (more)
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