You need an analytical device that recognizes its target, and a decisional mechanism to trigger an output. A stock timing system's analytical device, such as a chart, must recognize certain pricing patterns, and its decisional mechanism must produce an output signal to indicate whether the stock's price is rising or falling. My philosophy is to buy a stock when it is going up in price, and sell when it is going down. This philosophy may sound strange to many people, but it is grounded on the principle that stocks going up in price tend to continue going up, and stocks going down in price tend to continue going down. This philosophy is also consistent with the buying patterns of most investors.
Investors flock to the market when it is going up, and shy away when it is going down.
Favoring stocks which are rising in price is at the root of Value Line's celebrated timing system. Relative Strength is simply a measure of a stock's price performance compared to the market. High Relative Strength stocks are those which are outperforming the market. Many extremely successful investors use Relative Strength as their primary timing system. Members of Investors Alliance have access to Relative Strength information on over 5,000 stocks in IA's Stock Market Databank.