Higher Low

A higher low is a swing low on a price chart that sits above the previous swing low. It suggests that sellers could not push the price as far down as last time and that buyers were willing to step in at a higher level. Together with higher highs, a run of higher lows is the classic definition of an uptrend in technical analysis. After a long decline, the first higher low is often watched as an early sign that the selling may be ending, particularly if it is followed by a break above the most recent peak. Traders commonly place a stop-loss order just below the latest higher low, since a fall beneath it would break the pattern. Like other chart signals, it can produce false readings, especially in thin or volatile markets. The idea is part of wider trend analysis.