52-Week High

52-Week High

The 52-Week high is a rolling count of the high of the stock over the past 52 weeks. This of course translates into the yearly high for the stock. Both fundamental analysts and technical analysts pay close attention to the 52-week high. This represents a bullish move in the stock. Some traders utilize a trading strategy where if a stock makes a new 52-week high, the stock should be purchased. The assumption is that the stock will continue higher over the short-term and quick profits can be made with ease. On the flip side, some speculators will use the 52-week high as a place to unload shares. This is due to the fact that a test of a 52-week high will generally produce a news even, thus increasing the public’s interest. This increase interest produces the necessary volume required in order for professional traders to unload their shares. Many large data providers such as Yahoo Finance and Bloomberg will provide a list of stocks that are making new 52-week highs. Also, when looking at the overview of a stock, there will be a data field for 52-week high, in order for investors to see how close a stock is to this critical level. There are a number of market breadth indicators that use the 52-week high to gauge the strength of the market. The assumption is that the higher the number of stocks hitting 52-week highs, the more bullish the market. Some of the indicators that utilize the 52-week high are the cumulative new high/low line, new high/low ratio and the percentage of new highs to total market.

Tim Ord
Ord Oracle

Tim Ord is a technical analyst and expert in the theories of chart analysis using price, volume, and a host of proprietary indicators as a guide...

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