What is RS Rating?

RS (Relative Strength) Rating ranks a stock's price performance over the past 12 months against all other stocks in the same market. It's expressed as a percentile from 1 to 99.

• RS 99: The stock outperformed 99% of all stocks — in the top 1%
• RS 80: Outperformed 80% of stocks — strong momentum
• RS 50: Average — performed in line with the market
• RS 20: Underperformed 80% of stocks — weak momentum

William O'Neil, founder of Investor's Business Daily and author of "How to Make Money in Stocks," found that virtually all big stock market winners had RS Ratings above 80 before their major price advances.

How RS Rating is Calculated

AlpharvestPro calculates RS Rating using a proprietary weighted multi-period price performance formula. The calculation blends short-term, medium-term, and long-term returns — with heavier weighting on recent performance to capture momentum acceleration.

This blended score is then ranked against all stocks in the same market to produce the 1-99 percentile rating.

Why weighted toward recent performance?

A stock with strong recent performance that's accelerating is more actionable than one that had a big move many months ago but has been flat recently. By giving more weight to shorter timeframes, the formula captures momentum acceleration — the hallmark of institutional accumulation.

RS Rating Thresholds

RS in context with other screens:

AlpharvestPro uses RS Rating as a filter across all screening methodologies:

• Minervini Candidates: RS 70+ (one of the 10 trend template criteria)
• Stage 2 Conservative Filter: RS 70+ required
• VCP Patterns: RS shown for context, no minimum filter
• Entry Signals: RS shown for all signals — higher RS = higher conviction
• RS Leaders Report: RS 70+ sorted by rating (available for all 4 markets)

How to Use RS Rating in Your Trading

Strategy 1: Buy the strongest, sell the weakest

Focus exclusively on stocks with RS 80+ for new positions. Research shows that buying high-RS stocks and avoiding low-RS stocks outperforms the market over time. Momentum tends to persist — strong stocks get stronger, weak stocks get weaker.

Strategy 2: Watch for RS improvement

A stock whose RS Rating moves from 60 → 70 → 80 over several weeks is showing momentum acceleration. This often precedes a major advance. The stock may not be on anyone's radar yet, but the RS trend tells you institutions are accumulating.

Strategy 3: Use RS divergence as a warning

If a stock's price makes a new high but its RS Rating is declining, that's a divergence — a warning that the stock is losing relative momentum even though the absolute price is rising. Other stocks are gaining faster.

RS Rating Across 4 Markets

AlpharvestPro calculates RS independently for each market:

Important: RS 90 in Japan means the stock outperformed 90% of Japanese stocks. RS 90 in the US means it outperformed 90% of US stocks. The ratings are market-specific, not cross-market.

To compare across markets, use the Market Sentiment Dashboard — it shows the percentage of RS 70+ stocks in each market, giving you a sense of which market has broader momentum.

RS Rating vs. Relative Strength Line

Don't confuse RS Rating (a percentile ranking) with the Relative Strength Line (a chart overlay):

Both are useful. RS Rating is better for screening (give me all stocks above 80). RS Line is better for chart analysis (is this stock outperforming the index on the breakout day?).

FAQ

How often does RS Rating change?

Daily. It recalculates every trading day after market close using the latest price data.

Can a stock with low RS Rating be a good buy?

Rarely for momentum strategies. However, value investors and turnaround specialists deliberately buy low-RS stocks expecting mean reversion. Different strategy, different tool.

What causes RS Rating to spike suddenly?

A large single-day move (earnings gap-up, M&A announcement) can jump the RS rating significantly. These events often signal a new trend beginning.