- The report introduces a quantitative model called "250-day new high distance" to track market trends and identify market hotspots. The model is based on momentum and trend-following strategies, emphasizing the effectiveness of stocks reaching new highs as market indicators. The formula for calculating the 250-day new high distance is: $ 250\text{-day new high distance} = 1 - \frac{Close_t}{ts\_max(Close, 250)} $ where $ Close_t $ represents the latest closing price, and $ ts\_max(Close, 250) $ is the maximum closing price over the past 250 trading days. If the latest closing price reaches a new high, the distance is 0; otherwise, it is a positive value indicating the degree of fallback from the new high[11][12][13] - The report evaluates the model positively, citing its ability to capture market trends and identify leading stocks that perform well during market uptrends. It references studies by [George@2004], William O'Neil, and Mark Minervini, which support the idea that stocks near their 52-week highs tend to outperform those far from their highs[11][18][21] - The report provides backtesting results for the 250-day new high distance model. As of February 13, 2026, major indices such as the Shanghai Composite Index, Shenzhen Component Index, CSI 300, CSI 500, CSI 1000, CSI 2000, ChiNext Index, and STAR 50 Index have respective 250-day new high distances of 2.00%, 2.35%, 2.72%, 3.51%, 3.14%, 2.54%, 3.32%, and 5.50%[12][31] - The report introduces a quantitative factor called "Stable New High Stocks" to identify stocks with smooth price paths and consistent momentum. The factor construction involves screening stocks that have reached a 250-day new high in the past 20 trading days and applying criteria such as analyst attention (at least five buy or overweight ratings in the past three months), relative price strength (top 20% in 250-day returns), price path smoothness (measured by price displacement ratio), and sustained new high performance (average 250-day new high distance over the past 120 days and past 5 days)[24][26][27] - The report evaluates the factor positively, citing research by [Turan G Bali, Nusret et al@2011] and [Da, Gurun et al@2012], which highlight the superior performance of stocks with smooth price paths and strong momentum. The factor is designed to capture these characteristics effectively[24][26][27] - Backtesting results for the "Stable New High Stocks" factor show that 50 stocks were selected based on the criteria, with the highest representation in the technology and manufacturing sectors. Specifically, 21 stocks from the technology sector (dominated by the electronics industry) and 16 stocks from the manufacturing sector (dominated by the machinery industry) were included[27][32][30]