Relative strength Charting GOOG YHOO Google and Yahoo

If you had to guess what stock was stronger recently, would you choose Yahoo (YHOO) or Google (GOOG)?Remember Google (GOOG) broke to highs above $1,000 per share - it must be strong, no?There is a simple way to answer this question that takes the guesswork out of the equation.See objectively what stock is stronger and the comparison of similar actions by using relative strength charts.Yahoo and Google - at least initially - were very similar businesses in search engine that organizes data Web site and sold ads.While these similarities remain - and the commercials sold search engine traffic / custom ads - companies have indeed diverged in their products and services.That being said, when you want to compare their stocks, we can either "eye-ball" it or we can simply display a line of performance of "Relative Strength" such as the one at the bottom of the graph.The middle on the graph line is the 30 days rolling correlation, which is another way to show the relationship between two similar actions.To do this, simply divide one stock by the other.  In this case, the Relative strength line is created with Yahoo (YHOO) as the numerator and Google (GOOG) as denominator in a current division (end each day is divided and appears as a moving ratio line).When the line of force Relative increases, it means that the numerator (Yahoo in this example) is more strong "parent" for the denominator, Google.ã line force Relative decline indicates the opposite (force in Google versus Yahoo).Since the beginning of 2012, the relationship between these two stocks is relatively constant, as evidenced by a flat line.Google has exceeded end 2012 but we see a breakthrough of trendline, and since October 2012, Yahoo (YHOO) was the winner in the battle of the Relative Force.Although the two stocks rose sharply - and fell in late 2013 - together, it was the shares of Yahoo, which has always surpassed the shares of Google (illustrated by a growing trend in the Relative strength line).The interesting thing to note lately is the force in Google when he broke significantly above the $ 1,000 per share level - it appears as a sharp spike lower in the line RS (red arrow).Despite this breakthrough, shares of Yahoo continued to show strength as the RS line has increased since the low end October 2013.This is the fastest method to compare two similar actions, especially if you make a choice between which add to a portfolio or to use as a swing/position trading candidate.Trade the stronger name if all other factors are equal or similar.Follow as well as members of the commentary daily and idealized trades summarized for updates in real-time and commercial additional planning parameters that we look at a 'hold and bounce' or 'break and retrace' scenario unfold in the near future.Corey Rosenbloom, CMTAfraid to Trade.comFollow Corey on Twitter: http://twitter.com/afraidtotradeNew book by Corey The Complete Trading Course (Wiley Finance) is now available with the new version taking advantage of the life cycle of a trend Stock (also at Wiley) presentation.