Relative Strength (Stock Selection)

Volume Spread Analysis Glossary

The VSA stock-selection technique of identifying individual stocks that resist a decline in their parent index (or fail to participate in a rally) as the signature of professional accumulation (or distribution) on those names. When an index declines, stocks that hold firm are being supported by professional buying on every dip; this relative strength is the most reliable real-time indicator of accumulation. The selection process: watch for index declines, identify stocks resisting the decline, wait for a buy signal in the index, then buy the stocks that resisted — confirming with volume analysis on the individual stock. The inverse process (stocks that refuse to rally when the index rises) identifies short candidates.

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