Technical Indicators: New High-Low Line

The new high – new low index is a breath indicator which tracks the underlying behaviour of an index by subtracting the number of new 52 week lows from the number of new 52 week highs. By doing this we gain an insight into the underlying strength of a move in the index similar to the advance-decline line indicator and the percentage above moving average. Generally 52 week highs and lows are used given these highs or lows are interpreted as showing significant strength or weakness as well as removing the noise or false signals generated by shorter time frames.