What Is the RS Rating? Relative Strength Explained
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The Relative Strength Rating, or RS Rating, measures how a stock's price has performed against nearly every other stock over roughly the past year. A higher score means the stock has outperformed more of the market. It says nothing about the business behind the stock. It only measures the price.
RS Rating gets mixed up constantly with RSI (Relative Strength Index). That is a different tool, built for a different job.
RS rating in one sentence
The Relative Strength Rating ranks a stock's price performance against nearly every other stock over roughly the past year. A higher score means the stock has outperformed more of the market on price alone. A lower score means it has lagged. RS Rating is a measure of price behavior, not business quality.
At MoatMint, relative strength feeds the Momentum factor, one input into the five-factor stock rating: Quality, Momentum, Growth, Value and Financial Health. The other four factors look at the business behind the price, not just the price move itself.
RS rating vs RSI: they are not the same thing
RS Rating and RSI share three letters and nothing else. Confusing them leads to a real mistake: filtering for market leaders when you meant to check whether a stock is overbought, or the reverse.
RS Rating ranks one stock's price performance against every other stock in the market over a period of months. It answers one question: has this stock outperformed the market lately?
RSI (Relative Strength Index) is a bounded 0-100 oscillator. It is built from a single stock's average up-moves versus average down-moves over a short recent window, typically 14 days. It answers a different question: has this stock moved up or down sharply enough, recently, to look overbought or oversold?
| RS rating | RSI | |
|---|---|---|
| What it compares | One stock against the rest of the market | One stock against its own recent price swings |
| Typical time frame | Roughly the past year | Roughly the past two weeks |
| Scale | Percentile rank (MoatMint: 0-10) | Bounded 0-100 oscillator |
| Question it answers | Has this stock led or lagged the market? | Is this stock overbought or oversold right now? |
| Common use | Screening for market leadership | Short-term timing |
Both tools compare a stock's price to something. That is likely why the names collide so often. But one measures leadership over months. The other measures a short-term swing. When you see "RS Rating" on MoatMint, it means relative strength against the market, not the RSI oscillator.
How the RS rating scale works
RS Rating works on percentile logic. A stock is ranked against the rest of the market and given a score for where it lands. MoatMint shows relative strength on the same 0-10 scale used across all five rating factors: 0 is the weakest price performance in the market, 10 is the strongest. See the five-factor stock rating for how that shared scale works across Quality, Momentum, Growth, Value and Financial Health.
Some other tools use a 1-99 scale instead. The best-known example is the RS Rating built by investor William O'Neil and Investor's Business Daily (IBD) as part of O'Neil's CAN SLIM stock-selection system. On that scale, a rating of 90 means the stock has outperformed 90% of the market. The underlying idea is the same: a percentile rank of price performance. Only the number range differs. When you compare an RS Rating across two different sources, check the scale before you compare the number.
Why relative strength works (the momentum idea, briefly)
A high RS Rating matters because stocks that have outperformed tend to keep outperforming for a while, a decades-old pattern called momentum. None of it is a guarantee about any individual stock, and our guide to momentum investing covers the evidence, why it works and its real risks in full.
What counts as a "strong" RS rating?
There is no official cutoff. Investors commonly treat a score in the top 10-20% of the market as a first-pass filter, which on MoatMint's 0-10 scale is roughly 8 or higher. Treat it as a rule of thumb, never as a standalone reason to buy.
A high RS Rating paired with weak fundamentals is a classic trap. The five-factor stock rating guide has an example of exactly this: a fast-moving, fast-growing stock with strong momentum but thin quality and a rich price. The combined rating pulls well below what momentum alone would suggest. Strong price action can mean the market has already spotted something real. It can also mean a stock is popular for reasons that will not last. RS Rating alone cannot tell you which.
Relative strength alone is not the whole picture
Momentum is one factor among several a careful investor checks. Quality asks whether the business is actually sound, with an economic moat protecting its returns. Value looks at whether the price is reasonable. Financial health measures whether the company can handle a downturn. All of these matter alongside price strength.
A stock with a strong RS Rating but weak fundamentals elsewhere will not score well overall. The overall rating checks the business behind the price, not the price move by itself. Returns on capital tell you whether a company is actually creating value or just riding a popular story.
How to use RS rating in practice
Use relative strength as a starting filter, not a trading system. A strong RS Rating can surface stocks where the market has already noticed something. That narrows down where to spend your research time. From there, check quality, value and financial health before doing anything else.
One caution: chasing several stocks with strong relative strength in the same popular sector can concentrate risk instead of spreading it, even if each stock looks fine on its own. Use MoatMint's momentum screen to find stocks with strong momentum ratings, then research each one individually before deciding anything.
MoatMint ratings and this article are for informational and educational purposes only, not personalized investment advice.