Technically Speaking Archives
Technical Indicators & Overlays
LATEST TECHNICALLY SPEAKING ARTICLE:
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.
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.
Using a high-low price range to identify potential trend reversals based on range expansions.