The New Highs-Lows Cumulative function is a long-term market momentum indicator that determines the strength of the market. It's found by taking the total cumulative difference between new 52-week highs and new 52-week lows.
Interpretation of the New Highs-Lows Cumulative indicator is similar to the Advance/Decline Line in that divergences occur when the indicator fails to confirm the market index's high or low. Divergences during an up market indicate potential weakness just as divergences in a down market indicate potential strength.
Use the New High-Low Cumulative to confirm a current trend. As most of the time the indicator will move in the same direction as the major indices, when the indicator and the market move in opposite directions a market reversal is predicted. This is due to a decreasing number of stocks participating in the higher prices eventually yielding a reversal in the price trend.
The value of this indicator at the beginning of the data series is zero. This is a cumulative indicator and as such the actual value is less relevant than the slope and direction of the line.