DEFINITION of 'High-Low Index'

An index that seeks to provide confirmation of a market trend by comparing the daily number of stocks reaching new 52-week highs with the number reaching new 52-week lows on a broad equity index. It is calculated by dividing the number of high stocks and low stocks by the total number of trades on that day.

BREAKING DOWN 'High-Low Index'

The high-low index is considered bullish if it is positive and rising and bearish if it is negative and falling. Since the index can be quite volatile on a day-to-day basis, market technicians generally use a moving average on the data to smooth out the daily swings.

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RELATED FAQS
  1. How can I use market breadth to my advantage?

    Market breadth is a study that compares the number of companies on a given exchange that have created new 52-week highs to ... Read Answer >>
  2. What is the "percentage off the 52-week high or low"? How is this calculated?

    The "percentage off the 52-week high or low" refers to when a security's current price is relative to where it has traded ... Read Answer >>
  3. In economics, what is an index number?

    Read about the role of an index number in economics and how index numbers can be applied to all kinds of data, such as inflation ... Read Answer >>
  4. How do indexes determine which stocks are removed or added to them?

    Stock indexes are formed based on the kinds of stocks or financial securities they want to track. For example, the Standard ... Read Answer >>
  5. Is it possible to invest in an index?

    First, let's review the definition of an index. An index is essentially an imaginary portfolio of securities representing ... Read Answer >>
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    Learn about the advantages and disadvantages of using the S&P 500 as a benchmark for portfolio performance, and understand ... Read Answer >>
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