7 Relative Strength Stocks That Should Outperform

BALTIMORE ( Stockpickr) -- The rally is continuing in 2012, with the door closed on the best February for the S&P 500 in 14 years. That's on top of similarly strong January performance. All told, the broad market is up more than 9% so far this year.

Now the question is whether this stretch of positive performance will be able to continue into March.

From a technical perspective right now, it looks like that's going to be the case.

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With this 2012 rally here in full force, relative strength is one of the best tools we have to identify stocks that are likely to beat the market this year. So, how does it work?

Put simply, relative strength is a ratio of a stock's price to a broad market index. The ratio itself isn't important -- instead, it's the trend of the ratio over time that's investible. According to academic research, relative strength is a statistically viable strategy over a one-to-ten month time horizon; that's the timeframe we're focusing on today.

To find the seven names that made this list, I used a quantitative screen to rank the top S&P 500 names with relative strength over several timeframes, then weeded out the more attractive names using technical analysis.

The result is a set of relative strength trades that should outperform as we push through 2012. Here's everything you need to know.

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