Quantifying relative strength

Relative strength my way of doing it:
a stock which gives superior risk adjusted returns compared to nifty
Mathematically speaking
From a Capital asset pricing model perspective:

Relative strength can be quantified as a stock with high alpha
(high beta just means the stock is wild which means you want to trade it! but high alpha means the stock has been rewarding an investor with superior gains compared to the risks in holding it)

While larry williams would get into the nitty gritty of exact lows and highs and where market turned etc.
typical divergence setups
i.e stock higher low, nifty lower low = high rs
or stock new high before nifty = high rs
reverse for downside.

I actually had an argument with someone a few days ago who was questioning my buy call of idbi at 84-82 with sl 80-78 and target of 88-92-94

IDBI has a positive alpha + beta + rsqrd>0.8 for 20,200,1500 day durations
Meaning it is not a 'weak' stock in pure mathematical terms.
My chartist friends who were eyeballing the chart could not see this mathematical truth. Reason is they might be using 'pivots' in their own mind certain points of reference, highs/lows to derive 'relative strength/outperformance'
for instance if i bought idbi at its 52 week high last year, i would say it hasn't performed as well as some other stock which i bought at a 52 week high last year and has managed to make a new 52 week high :)

So anyway i guess the point is there are two ways to do relative strength
One is the pivot break. i.e all time high break is stronger than short term high break.
Second is the alpha/beta method
I will be posting a list of strongest+weakest stocks

How you use these values are up to you
you can be a trend follower, go long in dips on high alpha.
and go short in rallies on low alpha
will work really well for trading until good news/bad news which the insiders had been trading for arrives

Other way to trade is to
go long on breakouts in low alpha stocks if fundas are good
and go short in high alpha stocks if fundas are stretched when good news hits :)

Also some very important points for next few months as market heads to major topping out zone 4440-5550 monthly chart trendline.
Individual stocks can always form tops ahead of the markets!! So look to follow the trend on the weak alpha stocks on the downside as long as you are simulatenously long on some high alpha stocks.
I will be using a period of 25 days to do r/s
and the entire chart history to do the r/s based on pivot breaks.
meaning the pivot break list will show stocks which are showing max breakouts, above 52 week highs and what not. while my alpha/beta list will show r/s compared to nifty over last 1 month