Stock Market Leaders Tend To Have Bullish Relative Strength Lines. Here's How To Find Them.

Price action in the major stock market indexes has gotten more volatile lately, and an earnings sell-off for Nvidia (NVDA) Thursday didn’t help matters. But that doesn’t mean you should stop monitoring some of the strongest performers in the stock market.

One way to do that is with the RS Line At New High screen in the Stock Lists tab along the top of the homepage at Investors.com. IBD’s website updates the screen daily and displays — in real time during market hours — stocks with relative strength lines hitting new highs.

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A stock’s RS line compares its daily price performance against the S&P 500. When the line is sloping upward, it’s outperforming the index, and vice versa. Sometimes, a stock’s RS line will move into new high ground before the stock does, an exceptional sign of strength.

As a stock breaks out of base, it’s good to see the RS line move into new high ground along with the stock. A lagging RS line isn’t a good sign, generally, because it can often indicate a lack of power.

Stock Market Strength

The RS line is completely different from a stock’s Relative Strength Rating. The latter compares a stock’s price performance against all other stocks in IBD’s database. Stocks are rated on a scale of 1-99 with 99 being the best. A stock rated 99 has outperformed 99% of all other stocks based on 12-month price performance.

At one point Thursday, Imax (IMAX) made the RS Line At New High screen as the stock was breaking out of an 11-week consolidation. Because it broke out from an identifiable pattern or structure, the relative strength line got a blue dot on the daily and the weekly chart.

A strong earnings report was the catalyst. The immersive-movie theater chain reported strong fourth-quarter results, with quarterly profit up 115% and revenue up 35% to $125.2 million.

FTAI Aviation (FTAI) also made the screen after reporting earnings. The stock reversed higher and cleared a short consolidation, or shelf, with a 310 entry.

The specialty aviation company primarily leases commercial aircraft engines. But a newly created business segment announced in December — FTAI Power — will convert some of these jet engines to 25-megawatt natural gas turbines to power data centers.

United Airlines Stock

United Airlines (UAL) was just below a 118.94 entry Thursday, but its weekly had a blue dot and a RS line already in new high ground. Airline stocks had a strong day Thursday as profit-taking hit mining, AI-related and chip stocks.

Be sure to check in on the RS At New High screen regularly for some actionable stock ideas. In the biotech group, United Therapeutics (UTHR) had a bullish relative strength line that soared to a new high Wednesday (1), when the stock cleared a nine-week flat base.

Follow Ken Shreve on X @IBD_K Shreve for more stock market analysis and insight.

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