Scan 5,000+ stocks for relative strength new highs vs SPY while price is still below its own high. The coiled spring divergence setup. Each setup graded A+ to B.
Run this scan →Relative strength — the ratio of a stock's price to the S&P 500 — is one of the most powerful and underutilized tools in technical analysis. When a stock's RS line makes a new 52-week high while its actual price is still 5-20% below its own 52-week high, it creates what professional traders call a coiled spring divergence. The RS line is leading the price, telling you that institutional money is flowing into this stock more aggressively than the broad market.
This divergence matters because it reveals institutional conviction that isn't yet reflected in the headline price. Think of it this way: if a stock is outperforming SPY enough to reach a new relative strength high, but the price is still below its own peak, it means the stock has been gaining ground on a relative basis during a period when the absolute price pulled back. The implication is that when the broader market or the stock's own sector strengthens, this stock is coiled to make a powerful move to new absolute highs.
Mark Minervini has repeatedly emphasized that the best breakout candidates are stocks where the RS line reaches a new high before the price does. William O'Neil's research at Investor's Business Daily confirmed that stocks with RS ratings in the top 20% before their biggest advances was one of the most consistent characteristics of superperformers. Our scanner automates this analysis by calculating the RS line over 252 trading days, comparing it to its 52-week high, measuring the price gap, and confirming uptrend context with moving average analysis.
Relative strength analysis dates back to the earliest days of technical analysis. Charles Dow implicitly measured relative performance in his market commentary in the late 1890s. The formal RS line — dividing a stock's price by a market index — was developed and popularized by Investor's Business Daily (IBD) starting in 1984, where William O'Neil made the Relative Strength Rating a cornerstone of CAN SLIM methodology. Mansfield's variation, which compares the RS ratio to its own moving average, was introduced by Stan Weinstein in Secrets for Profiting in Bull and Bear Markets (1988). Mark Minervini elevated RS analysis further by demonstrating that stocks whose RS line reaches a new high before the price does are among the highest-probability breakout candidates, a concept he detailed in Trade Like a Stock Market Wizard (2013) and Think & Trade Like a Champion (2017).
Our scanner evaluates the following criteria when detecting RS New High Scanner setups across 5,000+ stocks daily.
For RS new high setups, an A+ grade means the RS line (stock/SPY ratio) is at a new 52-week high while the stock's own price is 10-20% below its 52-week high, above both 50 and 200 SMAs. An A grade requires RS within 2% of its high with price 5-15% below. B+ allows RS within 5% of its high. B meets minimum divergence criteria. This is not a prediction of future price movement — it is a way to prioritize which charts deserve your attention first.
Buy when the stock forms a specific technical entry — a base breakout, pocket pivot, or pullback to the 21 EMA — while the RS divergence is active. The RS new high signals where to look; the entry pattern tells you when to buy.
Place stop below the most recent swing low or below the 50-day SMA, whichever provides a tighter risk level. If the RS divergence resolves by the stock breaking below its 50 SMA, the coiled spring thesis is invalidated.
The initial target is a retest of the stock's own 52-week high — the price level that the RS line has already surpassed on a relative basis. Once the stock reaches its 52-week high, trail with the 10 or 21 EMA to capture the breakout move that often follows.
This is educational content only. Not financial advice. Always do your own research and manage risk appropriately.