"First-Time New High" is short for "First-Time New High in the Past Year." It refers to a situation where the price of a stock reaches its highest level in the past year for the first time. This phenomenon indicates that the stock has demonstrated strong upward momentum recently and has broken through the price resistance it faced over the past year. Unlike RPS, which measures a stock's performance relative to the overall market, the new high concept focuses on the stock's own price performance within a specific time frame. When a stock reaches a new high, it means that it has surpassed all previous price peaks in the past year's trading, signaling strong market demand and a significant advantage for the bulls.
Determine the Time Frame: Based on the current trading day, look back one year (typically 250 trading days). During this period, record the daily closing prices of the stock.
Screen for the Highest Prices: From the price data of the past year, filter out the daily highest prices. These highest prices represent the maximum levels the stock could reach on each trading day and reflect the price resistance encountered at different times.
Judge the New High: On the current trading day, compare the stock's closing price with the highest price recorded over the past year. If the current closing price exceeds the previous year's highest price and this situation has never occurred before, the stock is determined to have reached aFirst-Time New High.
Stock Selection Reference: Stocks that reach new highs are often strong performers in the market. These achievements are typically driven by factors such as improved company fundamentals, favorable industry trends, and positive market sentiment, thereby holding certain investment value. Investors can include these stocks in their selection scope and combine them with other indicators, such as RPS and fundamental analysis, to identify more promising investment targets. RPS reflects a stock's performance relative to the market, while a new high reflects the stock's own price breakthrough. When a stock has a high RPS score and reaches a new high at the same time, the two reinforce each other, enhancing the stock's investment attractiveness. This indicates that the stock not only performs well in the market but also has strong upward momentum.
Trend Judgment: A stock reaching a new high is a reinforcing signal of its upward trend. If, after breaking through, the stock price remains firmly above the new-high level and is accompanied by increased trading volume, it often indicates that the upward trend will continue. Investors can use this signal to judge the stock's trend and seize investment opportunities.
Risk Control: While a new high is generally a positive signal, risks should be noted. If, after reaching a new high, the stock's trading volume fails to expand effectively or the price quickly drops below the new-high level, it may indicate a false breakout and potential price correction. Investors should set stop-losses promptly to avoid significant losses.
Focus on Strong Stocks: It can help investors quickly identify strong stocks in the market. These stocks usually have great potential for price increases, providing investors with opportunities to obtain high returns.
Clear - cut Trend: A new high is a clear sign of a stock's upward trend. Investors can clearly determine the stock's trend direction, which is convenient for formulating investment strategies.
High Market Attention: Stocks that reach new highs often attract wide - spread market attention. The inflow of market funds may further drive up the stock price, creating a virtuous cycle.
Risk of Buying at High Prices: When a stock reaches a new high, its price may have already experienced a significant increase. Buying at this time, investors may face the risk of buying at high prices. If the stock price corrects subsequently, it may cause significant losses.
Risk of False Breakthrough: Some stocks may only briefly break through the new - high level of the year and then quickly drop back, resulting in a false breakthrough. If investors fail to identify this in a timely manner, they may suffer losses.
Impact of Market Environment: During a bear market or a significant market correction, it is more difficult for stocks to reach a First-Time New High, and the sustainability after the breakthrough may be poor. The overall pessimism in the market will have a negative impact on the stock's trend, reducing the effectiveness of the "First-Time New High" signal.
The "First-Time New High" concept is of great significance in stock investment analysis. However, investors should not rely solely on this indicator to make investment decisions. It should be combined with other indicators such as RPS, and factors such as company fundamentals, industry development trends, and the market environment should be comprehensively considered to develop a scientific and reasonable investment strategy, so as to increase the probability of investment success.
According to the new - high strategy, the website updates the trading data of US market, HK market and CN matket daily and calculates the daily stock - selection results after the market closes.