Relative Strength (Stock Selection)
Volume Spread Analysis glossary · Wyckoff Phases & Schematics
Definition
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.
Relative Strength (Stock Selection) in plain English
'Relative strength' here just means noticing which individual stocks refuse to follow the crowd. When the whole market is sliding but one stock barely dips, that stubbornness usually means big professionals are quietly buying it on every little drop — like a beach ball you keep trying to push underwater but it keeps popping back up. The playbook is simple: during a market fall, spot the stocks that hold firm, wait until the overall market flashes a buy signal, then buy those stubborn names (double-checking their volume). Flip it around — stocks that won't rise even when the market rallies are the ones the pros are secretly dumping, making them short candidates.
Also called: Stock Selection
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