Northspread
Formula sheet/NISM Series XV: Research Analyst/Technical Analysis
[ TECHNICAL ANALYSIS ]

Relative Strength Comparative (RSC) & On-Balance Volume (OBV)

RSC=(Price of Stock/Price of Benchmark Index[e.g.,Nifty50])×100RSC = ( \text{Price of Stock} / \text{Price of Benchmark Index} [e.g., Nifty 50] ) \times 100
OBVt=OBVt−1+Volumet(if Closet>Closet−1)OBV_{t} = OBV_{t-1} + Volume_{t} (\text{if Close}_{t} > Close_{t-1})
OBVt=OBVt−1−Volumet(if Closet<Closet−1)OBV_{t} = OBV_{t-1} - Volume_{t} (\text{if Close}_{t} < Close_{t-1})
OBVt=OBVt−1(if Closet==Closet−1)OBV_{t} = OBV_{t-1} (\text{if Close}_{t} == Close_{t-1})
Variables

RSC > 100 confirms outperformance. OBV tracks volume accumulation/distribution preceding major price trend breakouts.

Worked example
RSC vs. Nifty 50 and a 3-Day OBV Build-Up

A technical analyst is tracking Sundaram Specialty Chemicals Ltd, a high-priced stock, against the Nifty 50 benchmark. Starting from a reference-day OBV of 5,00,000 and closing price of Rs 27,000, the stock closes higher on Day 1, lower on Day 2, and higher again on Day 3, ending at Rs 27,500 while the Nifty 50 stands at 25,000. Compute the RSC on Day 3 and the cumulative OBV through Day 3.