In a bull market, almost everything goes up. But the key to successful trading is identifying the stocks that are leading the charge, not just going along for the ride. This is where the concept of daily Relative Strength comes in. It helps you answer a crucial question: "Which stocks are the strongest, relative to the overall market, *today*?"
Key Distinction: RS vs. RSI
This is **not** the Relative Strength Index (RSI), which is a momentum indicator that measures the speed and change of price movements on a scale of 0 to 100. The Relative Strength we are discussing here is a direct comparison of a stock's daily percentage change against the average percentage change of a benchmark, like the Nifty 50.
What is Daily Relative Strength?
Simply put, it's a measure of how a stock performs compared to the market average. If a stock goes up 3% on a day when the Nifty 50 average is up only 1%, that stock is showing strong relative strength. Conversely, if a stock is down -1% when the market is up 1%, it's showing significant relative weakness.
Visualizing Relative Strength
How to Use It: Practical Examples
Let's look at two scenarios from the same market day, where the Nifty 50 index had an average return of +0.5%.
Example: Strong Relative Strength
- Nifty 50 Average Return: +0.50%
- Stock XYZ Return: +2.50%
Even though the market was only slightly positive, Stock XYZ showed significant buying interest, outperforming the average by a wide margin. This is a potential leader.
Example: Weak Relative Strength
- Nifty 50 Average Return: +0.50%
- Stock ABC Return: -1.50%
Despite the market being positive, Stock ABC was down. This shows significant selling pressure and weakness compared to its peers. This is a potential laggard.
Find the Real Leaders Instantly
Calculating the average market return and then comparing all 50 stocks is tedious. The Daily Market Scan tool does this for you automatically, providing a simple **"RS Rating"** for every stock so you can spot the true outperformers in seconds.
See Today's RS Ratings →