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Plot of equilibrium price of Relative Strength .
Instead of the RS ratio, this is the plot of the price that will make the RS ratio equal to zero, we call this the equilibrium price.
- When the plot is below the symbol price plot, it means stock is performing above the benchmark
- When the plot is above the symbol price plot, it means stock is underperforming in comparison to the benchmark
- When the plot is close (or equal) to the symbol price plot, it means that RS is near the zero line, either crossing over or crossing below

The latest equilibrium is displayed over the plot. This gives a visual and quantitative idea of how far above or below the equilibrium price is in comparison to the current price.

In the above example, we see that HDFC Bank which was performing above the benchmark (trading above equilibrium price) whipsawed a lot (price near equilibrium price), before swaying down during the COVID-19 fall in the market (price is trading below the equilibrium price) . Currently, the equilibrium price is 1136, but HDFC Bank is trading below this price at 1033, around 100 points below.

## תגובות harlal1977
@harlal1977, Hi, you should use it the same way you use ARS/SRS technique. This study just shifts the focus from the ratio and zero line to the price of the stock. I find it useful at times because ultimately that is what we are going to trade with once we get a buy/sell/hold signal. In fact it is the same mathematical formula that is used for RS calculations, I just twisted the equation. For example, if I look at HDFC Bank today (1-Aug-2020), I will immediately know that I should wait for a price appreciation of 100 units for me to know that it is now performing at par with Nifty. Looking at the RS ratio, I would not know yet how many points of appreciation or depreciation is required before matching the benchmark. Hope you understand now. There could be many more ways to utilise this concept of equilibrium price, I just provided one obvious one.
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