Ticker&TapeThe RS line: is the stock beating the market?
The RS line is one of the simplest and most useful lines on a growth-stock chart. It shows, at a glance, whether a stock is doing better or worse than the market.
What the RS line is
The relative strength line (RS line) is the stock's price divided by the S&P 500, plotted day by day. The actual value does not matter. Only the direction does.
If the stock rises 10% while the S&P 500 rises 5%, the RS line goes up. If the stock is flat while the index falls, the RS line still goes up, because the stock is holding better than the market. If the stock rises 3% while the index rises 8%, the RS line goes down: the stock is making money but lagging.
How to read it
- Rising line: the stock is outperforming the market. Leaders have RS lines that slope up over months.
- Flat line: the stock is moving in step with the market.
- Falling line: the stock is underperforming, even if its price is going up.
- Line at a new high: the stock is outperforming more than at any point in the period shown.
RS line new high before price
One of the strongest clues in this method is an RS line that hits a new high before the price does. It often happens while a stock is still in a base. The market may be weak, the stock may be a few percent below its old high, but it is holding up far better than the index.
That tells you big buyers are supporting the stock. When the market turns up, stocks like this are often the first to break out to new highs. On the chart the platform marks these new highs, and the RS new high list below shows stocks doing it today.
The reverse is a warning. A stock that breaks out to a new price high while its RS line is well below its own high is lagging the market, and its breakout is less trustworthy.
Comparing with other benchmarks
By default the RS line divides by the S&P 500. On the platform you can switch it to the Nasdaq-100 or to the stock's sector ETF. Against the Nasdaq-100, you see whether a tech stock beats other big tech names. Against its sector ETF, you see whether it leads its own group, which ties into leaders and laggards.
You can also compare any two tickers directly on the Compare page. The RS line is the picture; the RS Rating turns relative strength into a single number.
Common mistakes
- Thinking a rising price means a rising RS line; it does not if the market rises faster.
- Reading the RS line's value instead of its direction.
- Buying a breakout while the RS line is far below its prior high.
- Ignoring an RS line new high just because the price has not broken out yet.
Key points
- The RS line is price divided by the S&P 500; only its direction matters.
- A rising RS line means the stock is beating the market.
- An RS line new high before price is one of the best early signs of a future leader.
On Ticker&Tape today
Live examples from the latest close, updated every trading day. Examples, not recommendations. 2026-10-02
Check what you learned
Answer at least 2 of 3 correctly to complete the lesson.
1. A stock rises 3% while the S&P 500 rises 8%. What does its RS line do?
The RS line is the stock's price divided by the S&P 500. A stock can make money and still lag; then the RS line falls.
2. The RS line hits a new high while the stock is still in a base, below its old price high. How should you read it?
An RS line new high before price shows the stock holding up far better than the index. It is one of the best early signs of a future leader.
3. What matters most when you read the RS line?
The actual value of the RS line does not matter. Only its direction tells you whether the stock is beating the market.
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