I'm sure you guys are all over this one, but TA is all foreign to me and I am hoping someone can point me in the right direction. I am an intraday trader and recently I have been trading UNH everyday. As UNH was falling from grace I noticed a few things. Everytime the market ran, UNH woudn't respond to market rallys and would trade down, and when the market slammed it slammed HARDER. More recently I have noticed as the market trades down UNH trades UP, and when the market slams he stays fairly put. So there has been a fairly bullish retstraint on behalf of UNH to convert froma very bearish stock to a neautral stock, for now. My question, Is there a technical indicator that measures the daily movement of a stock relative to the SnP? My goal, as you may imagine, is to take a look at the stocks that dont go down when the market goes down, and has follow-thru when the market does run. Thanks guys.
This may not help much, but if you use eSignal you can chart simple formulas by putting a space between operands and operators. UNH / $SPX typed into a summary window for instance, overlayed by $SPX, might be a simple solution.
dog, thats actually what gave me the idea that there must be a tech indicator I trade with one chart on my screen with a universal SnP futures ontop of it. My main objective is that I have a TI screener, and Id like to find some decent setups with the TI i described.
My question, Is there a technical indicator that measures the daily movement of a stock relative to the SnP? Are you referring to 'beta'? Copy/paste from investopedia: A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Also known as "beta coefficient". Investopedia Says... Beta is calculated using regression analysis, and you can think of beta as the tendency of a security's returns to respond to swings in the market. A beta of 1 indicates that the security's price will move with the market. A beta less than 1 means that the security will be less volatile than the market. A beta greater than 1 indicates that the security's price will be more volatile than the market. For example, if a stock's beta is 1.2, it's theoretically 20% more volatile than the market. Many utilities stocks have a beta of less than 1. Conversely, most hi-tech Nasdaq-based stocks have a beta greater than 1, offering the possibility of a higher rate of return but also posing more risk.
This may be what you're looking for in MetaStock code: http://trader.online.pl/MSZ/e-w-McClellan_Summation_Index.html
ya, Beta is likely the closest thing I could think of before I posted. But Beta is more used for a long period of time, for investing purposes. I am looking for something more of a trading tool. In what I have in mind, the difference from last month to this month can be drastic. Im starting to think it doesnt exist, which is a shock to me. hoping someone can help.
eb, I guess I don't understand exactly what you're looking for since from what I'm reading, the best indicator seems the most obvious, the relative strength line itself. This shows you exactly how the stock has performed in the past and how it is performing now relative to the other mkt. Not sure if you can screen by rs, it doesn't have absolutes like MACD, crossing this threshold or that, but you could come up with a universe of stocks and watch them along with the parent index, and the relative strength line, day to day. H
I found the answer. Everyone has been telling me its RSI, but that is not the case. It is called RS, and the only place that I see that has it tracked in investors.com. "...compares the stock's price performance vs. the S&P 500 index. The stock's price is divided by the value of the S&P 500, and the result is plotted on a line. An upward sloping RS line indicates the stock is outperforming the S&P 500, which is considered a good proxy for the general market. So, the higher the line, the better the stock is performing compared to the general market. The RS line (which is also shown in Daily Graphs charts) is not the same thing as RSI, or Relative Strength Index. The latter is an overbought/oversold indicator that we don't find to be useful..." thanks for your help guys