A new high is the most honest strength signal
For a stock to make a new high, it means everyone who has ever bought it is in profit — nobody is sitting overhead waiting to break even.
That matters. The biggest enemy of a rising price is often not fundamentals but overhead supply. When a stock breaks its prior high, it has cleared all the trapped sellers above it, and the path of further advance faces much less resistance.
So a new high is not a conclusion — it is a starting point. Many trending stocks begin their main advance right at the breakout of a prior high.
Five tiers, five degrees of strength
The app marks the highest tier the stock has reached, showing only the highest:
- 6-month high: short-term strength — could be just a bounce
- 1-year high: clears a year of trapped supply; medium-term trend has turned up
- 3-year high: still making highs after a business cycle — usually has fundamental support
- 5-year high: long-term trend clearly upward
- All-time high: the stock has never been here; there is no overhead supply at all
The higher the tier, the more trapped supply has been cleared and the stronger the market's endorsement. No new high shows "—".
In practice: a 6-month high is worth watching, but 1-year and above carries more weight. All-time-high stocks "look expensive", yet that is precisely the position with the least selling pressure — many people miss them out of fear of buying the top. This is where human instinct is most counterproductive.
Why 98%, not 100%
The app allows a 2% tolerance: if the close reaches 98% or more of the prior high for that window, it counts as a new high.
This is not looseness for its own sake. There are three reasons:
First, an exact breakout is rare. For the closing price to land precisely above the prior high on a given day is relatively uncommon. If you only catch the day of a clean breakout, you miss most opportunities.
Second, the approach is the key phase. A stock working its way up to within 2% of the prior high means buying has been strong enough to absorb most of the overhead supply. That "coiling" stage is often the time to position — on the actual breakout day, price has usually gapped and is hard to chase.
Third, being too strict filters out stocks that are challenging the high. Some names oscillate near the prior high for days or weeks, testing it repeatedly. With a "must fully break out" condition they never appear on your list, and by the time they break you are a step behind.
Widening to 2% is the balance between "not missing opportunities" and "not distorting the signal".
Suggested combinations
A new high alone means little. Judge it together with other conditions:
- With MA alignment: new high + strict bullish alignment means both trend and strength are in place
- With industry: if several names in the same industry make new highs together, the whole group is moving, not just one stock
- With pullbacks: a retracement to a moving average after a new high is a relatively safe entry (use Pullback Buy Points)
A reminder
A new high tells you "this stock is strong" — it does not guarantee it will stay strong. Failed breakouts and false breakouts both exist.
Its value is in narrowing the field: out of thousands of stocks, first find those the market has already endorsed with real money, then apply your own judgement for the final cut.