OPEN-SOURCE SCRIPT
Sector Rotation Momentum Framework
Overview
Markets rarely move with every sector advancing or declining at the same pace. At different stages of the market cycle, some sectors may strengthen while others lose momentum.
This framework compares the performance of a selected stock with a related sector ETF to provide additional context when evaluating trend direction. Rather than analyzing a stock in isolation, the script studies whether the stock is outperforming or underperforming its sector over time.
The objective is to demonstrate one approach to incorporating relative performance into a rules-based trading framework.
Core Idea
A stock's price movement can be viewed alongside the broader sector it belongs to.
For example:
- NVIDIA compared with the Technology Select Sector SPDR Fund (XLK)
- JPMorgan Chase compared with the Financial Select Sector SPDR Fund (XLF)
- Exxon Mobil compared with the Energy Select Sector SPDR Fund (XLE)
Comparing relative performance may provide additional context when studying trends.
Strategy Logic
Relative Performance
The framework calculates a ratio between the current chart and a selected benchmark ETF.
- When the ratio increases, the stock is outperforming the benchmark.
- When the ratio decreases, the stock is underperforming the benchmark.
Trend Confirmation
A moving average is used to identify the primary trend on the current chart.
Relative Strength Filter
Trades are evaluated only when both:
- The trend direction aligns with the moving average.
- Relative performance remains above its smoothing average.
Risk Management
ATR-based stop-loss and target levels adjust according to market volatility.
Features
- Relative performance comparison
- Sector benchmark analysis
- Trend confirmation
- ATR-based exits
- Configurable benchmark symbol
Intended Use
This framework is designed as an educational example of comparing a security with a sector benchmark. It can be used to study:
- Relative performance
- Trend alignment
- Sector participation
- Cross-market comparison
Disclaimer
This script is provided for educational and research purposes only. It demonstrates one approach to comparing a security with a benchmark using Pine Script. It does not predict future market behaviour and should be independently tested before being incorporated into any trading workflow.
開源腳本
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Try it free: pinegen.ai/
免責聲明
這些資訊和出版物並非旨在提供，也不構成TradingView提供或認可的任何形式的財務、投資、交易或其他類型的建議或推薦。請閱讀使用條款以了解更多資訊。
開源腳本
秉持TradingView一貫精神，這個腳本的創作者將其設為開源，以便交易者檢視並驗證其功能。向作者致敬！您可以免費使用此腳本，但請注意，重新發佈代碼需遵守我們的社群規範。
🚀 PineGen AI — the dedicated Pine Script AI tool. Describe any strategy, get 100% bug-free, compiler-checked Pine Script v6 code in seconds.
Try it free: pinegen.ai/
Try it free: pinegen.ai/
免責聲明
這些資訊和出版物並非旨在提供，也不構成TradingView提供或認可的任何形式的財務、投資、交易或其他類型的建議或推薦。請閱讀使用條款以了解更多資訊。