New Highs-New Lows Index
The New Highs-New Lows Index (NHNL) is a technical analysis tool used to measure the number of stocks that have reached new highs or new lows in a given period. It is used to gauge the overall market sentiment and to identify potential turning points in the market. The index is calculated by taking the number of stocks that have reached a new high in the past 52 weeks and subtracting the number of stocks that have reached a new low in the same period. The result is then divided by the total number of stocks in the index.
History of the New Highs-New Lows Index
The New Highs-New Lows Index was developed by William O’Neil, the founder of Investor’s Business Daily. O’Neil believed that the number of stocks reaching new highs and new lows was a good indicator of the overall market sentiment. He argued that when the number of stocks reaching new highs was greater than the number of stocks reaching new lows, it was a sign of a bullish market. Conversely, when the number of stocks reaching new lows was greater than the number of stocks reaching new highs, it was a sign of a bearish market.
The New Highs-New Lows Index is a popular tool among technical analysts and is often used in conjunction with other technical indicators to identify potential turning points in the market. It is also used to identify stocks that are outperforming the market and to identify stocks that are underperforming the market.
Comparison Table
| New Highs | New Lows | NHNL Index |
|---|---|---|
| 100 | 50 | 50 |
| 200 | 100 | 100 |
| 300 | 150 | 150 |
Summary
The New Highs-New Lows Index is a technical analysis tool used to measure the number of stocks that have reached new highs or new lows in a given period. It is used to gauge the overall market sentiment and to identify potential turning points in the market. The index is calculated by taking the number of stocks that have reached a new high in the past 52 weeks and subtracting the number of stocks that have reached a new low in the same period. For more information about the New Highs-New Lows Index, you can visit websites such as Investopedia, Yahoo Finance, and MarketWatch.
See Also
- Relative Strength Index (RSI)
- Moving Average Convergence Divergence (MACD)
- Bollinger Bands
- On-Balance Volume (OBV)
- Price-Earnings Ratio (P/E Ratio)
- Price-to-Book Ratio (P/B Ratio)
- Price-to-Sales Ratio (P/S Ratio)
- Price-to-Cash Flow Ratio (P/CF Ratio)
- Price-to-Free Cash Flow Ratio (P/FCF Ratio)
- Price-to-Earnings Growth Ratio (PEG Ratio)
