High-Low Percent

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market_indicators:high_low_percent [2019/06/24 19:38]
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market_indicators:high_low_percent [2023/08/07 18:56] (current)
jayanthi [Calculating the High-Low Percent]
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 ====== High-Low Percent ====== ====== High-Low Percent ======
  
-===== Introduction ​=====+===== What Is the High-Low Percent? ​=====
  
-High-Low Percent is a breadth indicator that measures the percentage of Net New Highs. After the market close, StockCharts.com calculates this indicator for the nine sector SPDRs and several indexes. High-Low Percent can be plotted ​on its own or used to create the High-Low Line. These indicators can then complement the analysis of the underlying security. For example, the High-Low Line based on High-Low Percent for the Technology SPDR (XLK) would complement the analysis of XLK. This article will explain how to use this indicator and show SharpChart examples. ​sample list of symbols ​can be found at the end of this article. ​     ​+The High-Low Percent is a breadth indicator that measures the percentage of net new highs. After the market close, StockCharts.com calculates this indicator for the nine sector SPDRs and several indexes. High-Low Percent can be plotted ​independently ​or used to create the High-Low Line. These indicators can then complement the analysis of the underlying security. For example, the High-Low Line based on High-Low Percent for the Technology SPDR (XLK) would complement the analysis of XLK. This article will explain how to use this indicator and show SharpChart examples. ​You can find a sample list of symbols at the end of this article. ​     ​
  
-===== Calculation ​===== +===== Calculating the High-Low Percent ​===== 
  
-StockCharts.com has High-Low Percent data going back at least three years. Note, however, that these calculations are based on the list of stocks in the underlying ​security or index (i.e. XLK), which do change. This means the breadth data from two years ago is based on the then-current holdings, which may be different from the present-day holdings. Even though the holdings for the nine sector SPDRs and indices ​are relatively stable, chartists should ​keep this in mind when using a long-term chart. ​+StockCharts.com has High-Low Percent data going back at least three years. Note, however, that these calculations are based on the list of stocks in the underlying index or exchange-traded fund (ETF), such as XLK, which do change. This means the breadth data from two years ago is based on the then-current holdings, which may be different from the present-day holdings. Even though the holdings for the nine sector SPDRs and indexes ​are relatively stable, chartists should ​consider ​this when using a long-term chart. ​
  
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 High-Low Percent fluctuates between -100% and +100% with zero as the middle line. In reality, extreme readings, greater than +70% and less than -70%, are very rare and the actual range is much smaller. ​ High-Low Percent fluctuates between -100% and +100% with zero as the middle line. In reality, extreme readings, greater than +70% and less than -70%, are very rare and the actual range is much smaller. ​
  
-In the numerical example above, the Technology SPDR has 77 stocks with 15 new highs and new lows. High-Low Percent is positive (+16.88%) because there are more new highs than new lows. In the second example, there are 2 new highs and 6 new lows. High-Low Percent is negative (-5.19%) because there are more new lows than new highs.+In the numerical example above, the Technology SPDR has 77 stocks with 15 new highs and two new lows. High-Low Percent is positive (+16.88%) because there are more new highs than new lows. In the second example, there are 2 new highs and 6 new lows. High-Low Percent is negative (-5.19%) because there are more new lows than new highs.
  
 {{:​market_indicators:​high_low_percent:​hlp-1-xlkexam.png|High-Low Percent - Chart 1}}\\ {{:​market_indicators:​high_low_percent:​hlp-1-xlkexam.png|High-Low Percent - Chart 1}}\\
 [[https://​stockcharts.com/​h-sc/​ui?​s=%24XLKHLP&​p=D&​yr=0&​mn=6&​dy=0&​id=p89926840805&​a=302873539|Click here for a live version of the chart.]] [[https://​stockcharts.com/​h-sc/​ui?​s=%24XLKHLP&​p=D&​yr=0&​mn=6&​dy=0&​id=p89926840805&​a=302873539|Click here for a live version of the chart.]]
  
-===== Interpretation ​=====+===== Interpreting the High-Low Percent ​=====
  
 As a breadth indicator, High-Low Percent is a lagging indicator that helps define the medium- to long-term trend. It takes 52 weeks to produce a new high or a new low. New highs expand after an extended move in the broader market (S&P 500) and remain strong as long as the uptrend extends. New highs may dry up with the first decline or sideways consolidation,​ but a surge in new lows is unlikely after just a few weeks. It takes an extended decline or major support break to trigger an expansion of new lows. Chartists can look at High-Low Percent as a stand-alone indicator or create a High-Low Line to identify turning points. As a breadth indicator, High-Low Percent is a lagging indicator that helps define the medium- to long-term trend. It takes 52 weeks to produce a new high or a new low. New highs expand after an extended move in the broader market (S&P 500) and remain strong as long as the uptrend extends. New highs may dry up with the first decline or sideways consolidation,​ but a surge in new lows is unlikely after just a few weeks. It takes an extended decline or major support break to trigger an expansion of new lows. Chartists can look at High-Low Percent as a stand-alone indicator or create a High-Low Line to identify turning points.
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 Chartists can look for crosses above/below the zero line to establish their trading bias or use a bullish/​bearish threshold. In this example, a move above 5% is deemed bullish, while a move below -5% is deemed bearish. These thresholds reduce the number of signals and whipsaws. Signals look great when a strong trend emerges, but there will also be late signals because of the lag. Keep this in mind when using High-Low Percent. ​   Chartists can look for crosses above/below the zero line to establish their trading bias or use a bullish/​bearish threshold. In this example, a move above 5% is deemed bullish, while a move below -5% is deemed bearish. These thresholds reduce the number of signals and whipsaws. Signals look great when a strong trend emerges, but there will also be late signals because of the lag. Keep this in mind when using High-Low Percent. ​  
  
-===== Conclusions ​=====+===== The Bottom Line =====
  
-High-Low Percent is a breadth indicator that chartists can use to define the path of least resistance or identify trend changes. In its simplest form, the path of least resistance is up when there are more new highs than new lows. The path is down when new lows outnumber new highs. ​Keep in mind that High-Low Percent is a lagging indicator ​and changes in this indicator usually ​occur after the trend in the underlying index or ETF has reversed. ​+High-Low Percent is a breadth indicator that chartists can use to define the path of least resistance or to identify trend changes. In its simplest form, the path of least resistance is up when there are more new highs than new lows. The path is down when new lows outnumber new highs. ​Remember ​that High-Low Percent is a lagging indicatorchanges in this indicator usually ​happen ​after the trend in the underlying indexor ETF has reversed. ​
  
 ===== SharpCharts ===== ===== SharpCharts =====