A common question regarding MarketSmith: what is the difference between the RS Line and RS Rating?
I originally wrote a short post describing the differences (see below). The video tutorial that follows provides some additional insight as well as highlights several examples on how to use both indicators when scanning for growth stocks.
Investor’s Business Daily recently hosted a webinar How to Trade Like an Investing Champion. The moderator, Irusha Peiris, was joined by U.S Investing Champions David Ryan (1985, 1986 and 1987) and Mark Minervini (1997). This is an excellent webinar to get insight into how these award winning traders analyze both the market and stock setups.
Continue readingOne sign of a potential true market leader is when there is a divergence of the stock’s price action versus the overall market. In this post I’ll show several examples where the S&P 500 was moving down while a stock was moving up, preceding a large gain over the coming months.
As with any technical or fundamental indicator, divergence is no guarantee of upward price movement. However, as you’ll see, divergence may be foretell a winning stock, one that can make a significant move higher.
Continue readingWebby’s RSI (really simple indicator) is a technical indicator to gauge the health of an uptrend. The concept of Webby’s RSI and the original implementation was created by Mike Webster. In this post I’ll share a Pine Script version of Webby’s RSI that you can use on TradingView.
Webby’s RSI, most often used with the Nasdaq Composite, is the percentage of the low vs. the 21-day moving average. At the beginning of a bull market, the higher the value, the better.
If you are familiar with TradingView and would like to install the indicator, you can find Webby’s RSI here.
Before we get into the code, here’s how Webby’s RSI looks as originally developed by Mike:
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