under Guru Screens>Momentum Investing>Price Momentum Screen, one of the rules is:
Rel Strength 1m < 0%
Can anyone let me know why this is the case?
Relative strength over 12, 6 and 3 months is statistically related to future increases. However relative strength over on one month has an inverse relationship with future returns.
So the best results, in theory, come from high momentum shares, with a drop in share prices over the last month. This is a classic 'buy on the dips' strategy.
David
