Any stock worth considering should have an RS Rating of 80 or higher. This way, you're concentrating on the top 20% of price performers. In fact, the most successful stock selections generally have RS Ratings of 90 or higher just before breaking out of their first or second base structure.

Any stock below an RS Rating of 70 is not in leadership territory. If you consider any stock with an RS Rating of less than 70, keep in mind that you're automatically ruling out the top 30% of the market. It's conceivable these stocks will still go up, but it's more likely they'll have only lackluster performance. Bottom fishers, those investors looking for a bargain among down-and-out stocks, are tempted to buy stocks with low RS Ratings. But history proves the most powerful stocks have shown prior strength and aren't rebounding from last place. Many fund managers rely on the Relative Price Strength Rating to help make investment decisions.

Related Resources:

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