Community Forex Questions
What are some real-world examples of stocks that gained due to strong relative strength?
Relative strength (RS) helps identify stocks outperforming the market or their sector. Here are some notable examples:
Tesla (TSLA) – 2020 Rally
Tesla’s relative strength surged as it consistently outperformed the S&P 500 and the auto sector.
The stock rose over 700% in 2020, fueled by strong momentum and investor optimism.
Nvidia (NVDA) – AI Boom (2023-2024)
Nvidia’s RS skyrocketed due to dominance in AI chips, far outpacing the Nasdaq.
Shares surged ~240% in 2023 as demand for GPUs exploded.
GameStop (GME) – Meme Stock Rally (2021)
Retail traders pushed GME’s relative strength to extreme levels, defying fundamentals.
The stock jumped 1,500%+ in weeks, showcasing RS-driven momentum trades.
Amazon (AMZN) – Pandemic Boom (2020)
AMZN’s RS soared as e-commerce demand grew, outperforming retail peers.
The stock gained 76% in 2020 while the broader market struggled.
Meta (META) – 2023 Rebound
After a 2022 crash, Meta’s RS rebounded due to cost cuts and AI adoption.
Shares rose 194% in 2023, beating most tech stocks.
Key Takeaway
Stocks with high relative strength often rise due to momentum, making RS a valuable tool for traders. However, overextension can lead to sharp corrections, so risk management remains crucial.
Tesla (TSLA) – 2020 Rally
Tesla’s relative strength surged as it consistently outperformed the S&P 500 and the auto sector.
The stock rose over 700% in 2020, fueled by strong momentum and investor optimism.
Nvidia (NVDA) – AI Boom (2023-2024)
Nvidia’s RS skyrocketed due to dominance in AI chips, far outpacing the Nasdaq.
Shares surged ~240% in 2023 as demand for GPUs exploded.
GameStop (GME) – Meme Stock Rally (2021)
Retail traders pushed GME’s relative strength to extreme levels, defying fundamentals.
The stock jumped 1,500%+ in weeks, showcasing RS-driven momentum trades.
Amazon (AMZN) – Pandemic Boom (2020)
AMZN’s RS soared as e-commerce demand grew, outperforming retail peers.
The stock gained 76% in 2020 while the broader market struggled.
Meta (META) – 2023 Rebound
After a 2022 crash, Meta’s RS rebounded due to cost cuts and AI adoption.
Shares rose 194% in 2023, beating most tech stocks.
Key Takeaway
Stocks with high relative strength often rise due to momentum, making RS a valuable tool for traders. However, overextension can lead to sharp corrections, so risk management remains crucial.
Apr 01, 2025 03:15