Relative strength is not just about absolute returns. It compares a stock or sector with the broader index. Persistent outperformance often suggests capital is increasing exposure.
Leading sectors provide clues
When the market is range-bound but certain sectors hold near highs or break out first, their fundamentals or capital preference may be stronger.
Avoid chasing without risk-reward
Relative strength does not justify buying at any price. Entry level, stop distance and upside potential still determine whether the trade is attractive.
