Strength is not just a recent gain
When I call a stock strong, I mean two things: demand is still present in the current market, and the stock is holding up better than its peers. A stock that has bounced sharply from a low may still be weak. A good business can also struggle when the market is unwilling to pay for risk.
That is why my order is fixed: broad market first, relative strength second, then a stock's moving averages, new-high behavior and financials. The order puts the amount of risk the market currently permits ahead of the excitement of finding a single winner.
First: read the market environment
I start with the home page's market lifecycle, index moving averages and breadth. An index above rising intermediate and long-term averages, with breadth not steadily deteriorating, is a more supportive environment for a trend-following study. If the index breaks its long-term averages while breadth contracts, I reduce chasing and total exposure rather than loosening the screen.
This step does not predict tomorrow. It answers a risk question: is a strong stock extending a trend in a tailwind, or merely falling less than others in a headwind?
Second: use RS to shrink the list
In RS Ranking, I use 60- or 120-day strength to find intermediate leaders, then 20-day strength to see whether demand is still present. The 250-day score helps identify longer-term leaders. High short- and long-term scores suggest continuation; a high long-term score with a falling short-term score may indicate consolidation; a low long-term score with a sudden short-term jump needs more confirmation.
RS ranks price. It is not an entry signal. In a falling market, an RS 90 stock can still have a negative return because it simply fell less than its peers.
Third: confirm with trend and earnings
In Find Leading Stocks, I check whether price is above the 20-, 50- and 150-day averages and whether the alignment remains orderly. I then review new-high tiers, quarterly revenue and EPS growth. When a single quarter is noisy, I expand H1/H2 EPS to see whether the improvement survives a wider time frame.
The final output is a research list, not an automatic portfolio. The point of this framework is to make each decision answer four questions: is the market supportive, is the stock outperforming, is the trend intact, and are earnings keeping up?
This is an educational research framework, not investment advice.