OHLC question from a newbie

[mechmo]

Hi everybody,

My question is what qualifies as a share price reaching a new high using the OHLC data.

Let's say that XYZ share closes at a new 3 month high of £19.5 with an intra-day high of £20. The next day, the same share reaches a 3 month intra-day high of £21 but closes at £18.

Which day qualifies for setting the new high, the one with the highest close price or the one with the highest high price??

Many thanks for all those who answer.

 

[tomorton]

Depends on the type of chart you look at and its set-up. Line charts always go from Close to Close to Close, media reports are always based on the closing price. Bar and candlestick charts will display the Highs as well. Highs are useful, but the Close outweighs the other prices for the day.

 

[mechmo]

Thanks very much for your answer.

I was referring to bar charts so it's good to know that the close price should take precedent as the new high.

 

[Pat Riley]

Eh? If price makes a new high/low that is the new high/low. Doesn't matter where it closes if you're talking about highs and/or lows. Closing prices are typically used in the print media (FT etc) when referring to an asset price, but even then when the reporting is on a significant new high/low it will be the actual high/low itself that will be referenced.

 

[mechmo]

Thanks for clarifying that. This actually fits in better with how I want to use this data to perform analasys. Not that I'm wanting to manipulate the data to fit in with what I want to see!

 

[timsk]

Eh? If price makes a new high/low that is the new high/low.

Hi Pat,
You're quite right of course, but I don't think Tom is disputing that. He's merely pointing out that line charts are based on closing prices and so, if that's all the trader is using, then s/he won't know necessarily that price achieved an intra-day high that's higher than indicated by the close price. At least, I think that's Tom's point!
Tim.

 

[Pat Riley]

There's a bit of a myth that closing price has more clout then any other and I suspect that harks back to the days when the exchanges closed the price at close was the one reported, but ya only have ta think of a 1 minute chart to understand that close has about as much significance as any other level covered by the bar regardless of the timeframe.

How the price gets to each level, the speed and momentum and volumes transacted at each level will give you far more of a feel for what's goin on.