High Low
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Risks and Considerations - Highs and lows can be volatile and misleading if not analyzed with other indicators (e.g., RSI, moving averages). Sudden news, like the recent tariff shocks, can create false signals. - Market efficiency theories suggest past highs and lows don’t guarantee future movements, as markets can be influenced by unexpected events.
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Practical Examples - **Uptrend**: If Apple’s stock makes a high of $200 and a low of $190, then later hits $210 (higher high) and $195 (higher low), traders might see a buying opportunity, expecting the uptrend to continue. - **Downtrend**: If Tesla’s stock peaks at $250 and dips to $220, then peaks at $240 (lower high) and drops to $210 (lower low), it signals a bearish trend, prompting sell signals.
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