Normalized ROC - Two Security Spread

This is my exploratory script for comparing the movement of two securities: the one that is studied is compared to some benchmark (like QQQ etc.). The movements of both are measured as ROC(t) normalized with each others own ATR. Normalized ROCs are then subtracted to create a "spread".

The plot draws both securities' NormROC as lines and the spread as a histogram. So, histogram shows green, when the stock is stronger than the benchmark even in their normalized terms, indicating strong momentum, and vice versa as red. Furthermore, the indicator marks with triangles so called hidden strength and hidden weakness. Hidden strength occurs when Benchmark (e.g. QQQ) is weak, but the stock is not. The assumption is that when the benchmark turns positive the stock is ready to run faster. Respectively, hidden weakness is when Benchmark is strong, but the stock does not follow. Of course, there will be many false signals, these are just potential indications of strength and weakness.

Parameters can be adjusted, length of ROC and the line smoothing EMA. Also alerts can be set for histogram level and the hidden strength/weakness levels.

DISCLAIMER: Indicator has not been tested. Use with caution and own responsibility. As always, be aware of false signals. Never make decisions with one indicator only.