Ask Colin

What is meant in common usage by a New High for a share?

The short answer is that it depends. It depends on the context and it may also depend on who is saying or writing it. One of the problems that beset technical analysis is the way terms are used loosely and inaccurately. Perhaps I should not be so hard on technical analysis, as there is a general lack of rigour in much writing in many fields. However, technical analysis seems to have more than a fair share of careless thinkers and does lack generally accepted definitions.

What I mean by a "high" refers always to the high price for a bar. This is where the context comes in. The period of the bar may be a minute, an hour, a day, a week or a month.

However, some people refer only to closing prices, which I think is confusing. In this case they should say that the market CLOSED lower than it had for whatever period they were using.

The other area of confusion is that "high" is often used in relation to a swing or trend. So we might say that AMP made a new high today and mean for the trend, rather than an all-time high. I try (not always successfully) to be exact in this by saying either that it made a new "peak" (I use high for bars and peak for trends), or that it made a new "high for the trend". If it is a high for the stock over its entire history, I try to always say "all-time high".

I guess if I slip occasionally, so will others. There will also be still more who refer only to the closing price in this context too, as discussed above.

There is also an indicator called New High - New Low. In this case we have a technical definition of a New High, which is a price made on the day/week/month in question was higher than any price in the last year (52weeks).

I hope this goes some way to clarifying this for you.

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