high-low index(redirected from High Low Index)
In technical analysis, an index of the number of stocks reaching a new high minus the number of stocks reaching a new low. This is used to determine whether a market movement is sustainable. A positive high-low index when the market has gone up means that that market is likely to continue to rise. However, mixed signals (i.e. a negative high-low index when the market has risen or vice versa) indicates that the current market movement is unlikely to continue.
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A cumulative tabulation of the number of stocks reaching new highs minus the number of stocks reaching new lows. Technical analysts use the high-low index to measure the strength of the market's movement. In general, movement of the high-low index in the same direction as the market confirms the market's movement and indicates that this movement is likely to continue in the same direction.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.