What is RPS? Complete guide to relative price strength
⚡ Quick Answer (Quick Answer)
RPS (Relative Price Strength) is a cross-sectional percentile rank of price performance over a specified trading-day window within the same market. Scores typically range from 0 to 100; RPS=85 means the security's window performance exceeded about 85% of the valid same-market sample. RPS is commonly used in the L (Leader or Laggard) step of CANSLIM, but it is not a buy/sell signal.
Key interpretation
RPS50 measures in-market relative price performance over the most recent 50 trading days; each market is ranked separately. Any RPS reading must be kept with its market, lookback window, valid sample, and observation date. RPS describes historical relative performance only—it is not a forecast of future returns, a rating, or investment advice.
📑 Table of Contents
1. What is RPS?
RPS (Relative Price Strength)is a ranking metric of a stock's price performance versus other stocks in the full market over a given period. RPS scores typically range from 0 to 100; the higher the score, the higher the stock ranks on interval price performance within the valid same-market sample.
This concept was first systematically introduced by legendary US investor William O.NeilWilliam O'Neil in How to Make Money in Stocks, and is CANSLIM stock-selection method's core quantitative metric for "L" (Leader or Laggard).
2. How is RPS calculated?
RPS is calculated in several steps:
- Calculate the return:For each stock, calculate the percentage price change over the past N days. Common RPS windows include RPS20 (20 days), RPS50 (50 days), RPS90 (90 days), RPS120 (120 days), and RPS250 (250 days / about one year).
- Full-market ranking:Sort all stocks by return from high to low.
- Calculate the percentile rank:Each stock's RPS value = (1 - that stock's rank position / total number of stocks) × 100.
📊 Example:
Suppose the market has 2700 Hong Kong stocks and Tencent ranks 135 by return over the past 120 days. Then:
RPS120 = (1 - 135/2700) × 100 = 95
This means Tencent's 120-day return outperformed 95% of Hong Kong stocks.
3. Difference between RPS and RSI
Many beginners confuse RPS (Relative Price Strength) with RSI (Relative Strength Index). The names are similar but the measures are fundamentally different:
| Comparison | RPS (Relative Price Strength) | RSI (Relative Strength Index) |
|---|---|---|
| Metric type | Ranking metric (cross-sectional) | Oscillator (time-series) |
| Compared with | Stock vs all other stocks in the market | Stock's current price vs its own price history |
| Core use | Find the market's strongest leading stocks | Identify short-term overbought (>70) or oversold (<30) |
4. How to interpret RPS readings?
RPS readings can be understood in several bands:
| RPS range | Strength grade | Investment implication |
|---|---|---|
| 90-99 | Very strong | Market Top 10%—true leading stocks |
| 80-89 | Strong | Minimum CANSLIM screen (RPS ≥ 80) |
| 60-79 | Average | In-line performance, not distinctive |
| 40-59 | Weak | Lagging most stocks |
| 1-39 | Very weak | Among the market's worst performers—avoid |
⚠️ O'Neil's iron rule:
"Never buy stocks with an RPS below 80." This is one of the core CANSLIM stock selection principles. Before a major bull stock launches its big surge, its RPS is almost always above 80.
5. RPS and the CANSLIM method
CANSLIM is a systematic stock selection method proposed by William O'Neil in "How to Make Money in Stocks", with each letter representing a dimension of stock selection:
- C(Current Earnings) — Quarterly EPS growth year-over-year ≥ 25%
- A(Annual Earnings) — Annual earnings growth, three-year compounded growth rate ≥ 25%
- N(New) — New products, new management, new highs
- S(Supply & Demand) — Supply and demand dynamics, focus on volume
- L(Leader or Laggard) — Leader or laggard stocks.RPS is the core indicator measuring this dimension.
- I(Institutional Sponsorship) — Institutional investor ownership
- M(Market Direction) — Market direction
"The best stocks will have an RS Rating of 80 or higher at the beginning of their major price advances."
6. Practical application: finding leading stocks with RPS
Strategy One: RPS Screening + Fundamental Confirmation
- Select the target market (A-shares, US stocks, Hong Kong stocks, Japanese stocks) on the RPS Stock platform
- 設定 RPS120 ≥ 80 作為初步篩選條件
- Further filter by RPS250 ≥ 80 to ensure long-term strength
- Conduct fundamental research on screened stocks (e.g., C and A dimensions in CANSLIM)
策略二：RPS 多週期共振
When a stock's RPS (20), RPS (50), RPS (120), RPS (250) are all above 80, it is called"RPS Multi-Period Resonance"This is one of the strongest technical signals, indicating the stock leads the entire market in short, medium, and long term with continuous capital inflows.
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