Relative Strength Analysis
figure 24.13 Double Moving Average Crossover Identifying the RS Line Trend.
Source: StockCharts.comexamples of applying technical analysis on rS Lines
Figure 24.12 illustrates an RS line breaking down prior to price confirmation. Such
formations provide an early indication of potential breakouts and reversals in price.
Figure 24.13 illustrates the usefulness of a double moving average crossover
of an RS line in identifying the start of the downtrend in the RS line of the CBN
China 600 Index/the CRB Index ratio.
Figure 24.14 is another example of the usefulness of a double moving average
crossover in identifying a downtrend in the RS line of the Financial/Industrialsfigure 24.12 Bearish Divergence between Gold and the Gold Miners and Gold Bugs
Index.