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Net New Highs

December 20, 2014

Breadth indicators help investors and traders gain a feel for how widely a broad universe of stocks is participating in the movement in the market. These indicators are the aggregate data of a grouping of stocks—usually those that make up a given exchange or index—and are often used to determine whether the market is in an uptrend or downtrend as well as to identify market tops or bottoms.

In this installment of Technically Speaking, we look at one breadth indicator in particular: net new 52-week highs.

Introduction

Net new 52-week highs is the difference between the number of stocks hitting new 52-week highs and those hitting new 52-week lows. This indicator conveys the internal strength or weakness in the market. When there are more stocks hitting new highs than there are those hitting new lows, the indicator is positive, which is bullish. Likewise, when there are more stocks hitting new lows than new highs, the indicator is negative, or bearish.

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September 20, 2014

McClellan Summation Index

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McClellan Oscillator

Measuring the momentum of net advancing issues, the McClellan Oscillator can indicate possible trend reversals in market indexes.

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Stochastic Oscillator

The stochastic oscillator is a momentum indicator useful for identifying potential price reversals. Like all oscillators, the stochastic oscillator is best suited for trading ranges or prolonged trends where prices periodically deviate from the prevailing trend.

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The Mass Index

Using a high-low price range to identify potential trend reversals based on range expansions.